How Does the Oberth Effect Work?

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The Oberth Effect explains how a rocket can achieve greater kinetic energy by applying thrust close to a massive body, where speed is high and gravitational potential is low. This phenomenon occurs because the kinetic energy of the rocket's fuel contributes to the overall energy during the burn. The effectiveness of the maneuver relies on maximizing impulse at low altitudes, where the rocket's velocity enhances the energy gained. However, this process is not without trade-offs, as the kinetic energy of the fuel originates from previous fuel consumption or gravitational potential energy. Understanding the Oberth Effect is crucial for optimizing space missions and propulsion strategies.
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How does the Oberth Effect work, and why?

Why would acceleration applied at one point in an orbit be different from acceleration applied at another point in the same orbit?

Are you getting something for nothing? Where's the tradeoff coming from?
 
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http://en.wikipedia.org/wiki/Oberth_effect

Im no expert but the jist of it that i got was that you would 'ideally' be leaving your fast moving rocket exhaust stationary at the bottom of a gravity well...so there is no free lunch but there is a perfect time and place to 'burn'

Oberth maneuver where the application of an impulse, typically from a rocket engine, close to a gravitational body (where the gravity potential is low, and the speed is high) can result in a higher change in kinetic energy and final speed (i.e. higher specific energy) than the same impulse applied farther from the body for the same initial orbit. For the Oberth effect to be most effective, the vehicle must be able to generate as much impulse as possible at the lowest possible altitude
 
Your fuel has kinetic energy as well as chemical energy because it is moving along with the rocket. The faster you are going when you burn it the more energy you get because you are using both. It's no free lunch because the kinetic energy content of your fuel came from either fuel that you burned previously or from gravitational potential energy.
 
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