One of the major mistakes made by the Calories In/ Calories Out (CICO) hypothesis is the presumption that energy is stored in the body as a single compartment. They consider that all foods can be reduced to their caloric equivalent and then stored in a single compartment in the body (Calories In). The body then uses this energy for basal metabolism and exercise (Calories Out).

This model looks something like this:

All energy is stored in that one compartment. However, this model is a complete fabrication. It does not exist. This known mis-understanding has led to general acceptance of the CICO theorem. According to this model, by reducing the amount of calories going in, or increasing the amount going out, you may reduce the amount of body energy stored as fat.
Of course, this Eat Less, Move More (or Caloric Reduction as Primary) strategy has a known success rate of about 1% or a failure rate of roughly 99%. This does not deter any of the medical or nutritional authorities to question the sagacity of their advice, though.
To better understand how energy is stored in the body, it is more accurate to use a two compartment model. Dr. Kieron Rooney’s diagram demonstrates that the body is able to derive energy from 3 sources – glucose (carbs), fat or protein. However, protein is not stored as an energy source and is only used when there is excessive dietary protein after which it is turned to glucose.
So, this leaves two potential fuel sources – glucose and fat – and these are stored in different compartments. Glucose is stored in the liver as glycogen – a molecule that is composed of long chains of sugars. This is easily accessible to the body, but there is a limited amount that is able to be stored. After that threshold is reached, the body stores fat. Think of glycogen like a refrigerator. It is very easy to move food in and out of the fridge, but the storage space is limited.
Body fat is much more difficult to access, but you may store unlimited amounts. Dietary fat is directly added to the body’s fat stores. Excessive carbohydrates are turned into fat by the process known as De Novo Lipogenesis (DNL). Think of body fat as a freezer that you store in your basement – you can store lots of food in the freezer but it is more difficult to get at it compared to the fridge. You can also store more than 1 freezer in the basement if you need more space.
As you eat, the body stores energy. As you don’t eat (fast), the body must take stored energy from the body to burn for fuel. But it does not take equal amount from both compartments (fat and glycogen). Glycogen is burned almost exclusively until it is finished – this can last 24-48 hours of pure fasting.
This is logical since it is much easier for the body to get at the glycogen. Think about it this way. If you buy groceries, you first store it in the fridge. Once it is full, then you start to store it in the freezer. When it comes to taking food out to eat, you start by eating the food in the fridge.
Only after almost the glycogen is already burned for energy does the body turns to its stores of fat. Similarly, only when the food in the fridge is gone do you want to go downstairs to that cold dank basement to get the food in the freezer. It takes more effort. You do not burn equal amounts of glucose and fat. For example, if your glycogen ‘fridge’ is full, you will not use any of your fat in the ‘freezer’. If you need 200 calories of energy to go for a walk, you take that exclusively out of the glycogen with none of the fat being burned.
The two compartments for energy are not burned simultaneously, but sequentially. You need to empty out the fridge before you can start using the food in the freezer. In essence, the body can either burn sugar or fat, but not both. This is controlled partially by insulin, and also directly by the Randle cycle – described in 1963. This is also sometimes called the glucose-fatty acid cycle.
In isolated heart and skeletal muscle cell preparations, Randle and his colleagues were able to show that cells that were using glucose for energy were inhibited from using fat and vice versa without any interference from insulin or other hormones. This biochemical mechanism directly forbids the body from using both fuels at once. You either burn sugar or fat, but not both. You can see from the diagram that using glucose eventually leads to the production of Malonyl-CoA which inhibits the use of fat (LCFA – Long Chain Fatty Acid).
So, why can’t you lose weight using the CICO method? Because it is based on the incorrect idea that all calories are equal. When you store food energy (calories), it is stored as sugar (glycogen) in the ‘fridge’ and fat in the ‘freezer’. But you must burn through the sugar first before you can start burning fat.
So, now you want to lose body fat. The first thing you need to do is clear out the sugar in your refrigerator. However, if you are continually filling up your fridge 3-6 times a day with sugar, then you will never start burning the fat in the freezer. The CICO method ignores the two compartment problem and pretends that all calories are stored equally and burned equally (single compartment), even though this has been known to be false for at least 50 years. This is the equivalent of the standard calorie restricted diet of eating 3-6 meals a day with a relatively high carbohydrate (50-60%) content.
You imagine that since you are filing up the fridge with less glucose, it will eventually empty. However, this does not happen. Why? Because, as you start putting less food in the fridge, your body senses that and starts to get antsy. So, it starts to make you hungry and want to eat more. If you don’t fill it up, it will decrease your metabolism so that it is burning less energy.
What’s the solution? First, you could follow a Low Carb, High Fat (LCHF) diet. By severely restricting the amount of carbohydrates, we keep our glucose fridge empty. Now any energy that must be burned must come out of fat freezer. This essentially turns the two compartment problem into a single compartment problem.
Second, you could try intermittent fasting (IF). Fasting essentially burns through all the stored sugars in the fridge quickly. Will you get hungry? Yes, probably. But if you push through that, your body is forced to burn fat for energy. The metabolism does not slow down because of the compensatory hormonal changes of fasting. After several days, hunger is also suppressed – the mechanism is unknown, but likely related to the ketone production.
The bottom line is this. You can store energy in the form of sugar or fat. In the fasted state – you can either burn sugar or fat for energy, but not both. If you are continually supplying your body with sugar, it will not burn fat.
Fasting provides a very quick way to start burning fat. It provides a solution to the two compartment problem. The reason why the Calorie pundits never understand why their model doesn’t work is because they have fundamentally mis-understood the problem as a single compartment.
Update Jan 28, 2016
I belatedly realized that I forgot to add this section. Actually, it didn’t update, so I thought it was in here but it actually wasn’t. Sorry.
There is one more critical input into the system. How easy is it to get food energy from the freezer? If the freezer is locked away in the basement behind steel gates and barred, then it will be very difficult to get the fat out. What’s the main hormone that controls it? The answer is… insulin. (Actually, insulin is the answer to most of the questions on this blog)
It’s well known that insulin inhibits lipolysis. That’s a fancy way of saying that insulin stops fat burning. Well, that’s normal. Insulin goes up when you eat, so it tells the body to start using the incoming food energy and stop using the fat in the freezer.
So, if your insulin is high from insulin resistance, you may find that your body is not able to get at the fat in the freezer. So, as you lower the incoming calories (Caloric Reduction as Primary strategy – Eat Less) your body is unable to get any fat to burn. So it compensates by reducing caloric expenditure. Hence basal metabolism falls.
If you are 8 years old, your insulin resistance is minimal and fasting insulin is low. That means it’s really easy to get at the fat in the freezer. It’s like the freezer is right beside the fridge. Easy Peasy. So, if you simply reduce calories, your body can easily compensate by getting some fat out of the freezer.
This explains the time dependence of obesity. That is, those that have been obese for a long time have a much, much harder time losing weight. Because their insulin resistance is high causing elevated insulin levels all the time.

Start here with Fasting part 1
Continue to Fasting Part 22 – The Biggest Loser Diet