Fuel efficiency is a form of thermal efficiency, meaning the efficiency of a process that converts chemical potential energy contained in a carrier fuel into kinetic energy or work. Overall fuel efficiency may vary per device, which in turn may vary per application, and this spectrum of variance is often illustrated as a continuous energy profile. Non-transportation applications, such as industry, benefit from increased fuel efficiency, especially fossil fuel power plants or industries dealing with combustion, such as ammonia production during the Haber process.

The specific energy content of a fuel is the heat energy obtained when a certain quantity is burned (such as a gallon, litre, kilogram). It is sometimes called the heat of combustion. There exists two different values of specific heat energy for the same batch of fuel. One is the high (or gross) heat of combustion and the other is the low (or net) heat of combustion. The high value is obtained when, after the combustion, the water in the exhaust is in liquid form. For the low value, the exhaust has all the water in vapor form (steam). Since water vapor gives up heat energy when it changes from vapor to liquid, the liquid water value is larger since it includes the latent heat of vaporization of water. The difference between the high and low values is significant, about 8 or 9%. This accounts for most of the apparent discrepancy in the heat value of gasoline. In the U.S. (and the table below) the high heat values have traditionally been used, but in many other countries, the low heat values are commonly used.

See also:
http://www.projects.juliantrubin.com/science_fair_project/renewableenergy/biofuel_1.html
http://en.wikipedia.org/wiki/Fuel_efficiency

Source: Wikipedia (All text is available under the terms of the GNU Free Documentation License and Creative Commons Attribution-ShareAlike License.)