This summer gas prices on the East Coast hit the highest levels in six years, according to the EIA. In fact, for only the second time ever, average U.S. gas prices topped $3.75 a gallon.

It’s jarring that this comes despite two things that seemingly should lead to lower prices: huge gains in U.S. oil production and lower demand for energy because of more energy-efficient cars, appliances, and so on. In fact, according to BP, energy supplies worldwide—encompassing everything from oil to geothermal—have been rising by 2.5 percent a year since the century’s start, around the fastest rate since OPEC’s 1973 oil embargo.

Why has rising energy production failed to lower prices at the pump? And why has it gone hand in hand with anemic GDP growth this century—at 2.5 percent worldwide on an annualized basis, it’s the lowest rate since World War II—when in the past, rising energy production typically accompanied faster economic growth? It seems even weirder when you realize energy efficiency has been rising: it takes 3 percent less energy today than in 2000 to generate the same amount of global GDP.

The simple but disturbing explanation is that a rising proportion of the energy produced today gets funneled back into producing energy—i.e., it takes more energy to get energy. This means a significant chunk of the growing amounts of energy being produced is getting diverted from the main economy, where it could be put to productive use in such ways as building infrastructure or running factories, etc. It’s a self-referential flow that if taken to the ultimate, absurd level—where 100 percent of all energy being produced went to producing energy—would shut our economy down.

Yet another aspect of the dysfunctional nature of today’s energy picture is that while the energy sector accounts for an ever rising portion of GDP, the gains in energy production are way out of whack with the gains to GDP.

Specifically, since mid-1999, U.S. oil production has climbed nearly 50 percent to 8.4 million barrels a day. Natural gas production has increased by a similar percentage, while coal production has declined by about 15 percent, for an overall gain in energy production of about 45 percent. During this same period, however, the value added to GDP by the energy sector has climbed more than fourfold—meaning each unit of energy being produced is adding an ever larger amount to our GDP.

This isn’t good, and it goes a long way in explaining why growth in energy production and gains in energy efficiency haven’t translated into increased GDP growth. Energy’s contributions to the economy are mostly indirect, via its role as a power source for virtually every economic unit, from cars to home appliances and even to smartphones. Its direct contribution to the economy pales in comparison. (That’s why if energy production accounted for nearly 100 percent of our economic output, the economy would effectively shut down.) The basic idea is that the greater the portion of the economy dedicated to energy production, the smaller the scope for using energy for other uses. To put it as simply as possible, the more energy used to create energy, the worse off we are.

The overall energy picture, then, is cause for alarm (and, we hope, action). But for investors, it carries an overwhelming message: for the foreseeable future, the world will demand more energy, greater energy efficiency, and in much of the world if not the U.S., the acceleration of growth in new energy sources. This means that virtually every decent company in any way related to energy should prove a solid long-term investment.