Ann: Management and Organisational Update, page-149

The importance of the conversion ratio is similar to the peak oil argument. If it requires a gallon of oil to produce and transport a gallon of oil, further production from that particular oil well is no longer feasible.
If Oman for instance, can produce low cost hydrogen using its low cost oil, then rather than use its oil to produce hydrogen, some of which is lost in storage and transport, it is a lot more economical to simply export its low cost oil. If on the other hand, it uses wind and solar to produce hydrogen, Oman loses its cost advantage and like the peak oil example, the energy output needs to be greater than the energy input. Otherwise, why bother. This is what is meant by the conversion ratio.