The XP Extractor can be used to remove 1 level from the player's XP to fill a empty bucket with Mob Essence. The mob essence bucket can be placed on the ground and drunk with a straw, or used as resource for an Auto-Enchanter, Auto-Spawner, or other block.
Accumulating levels past 15 before extracting will result in a reduced XP-essence efficiency. Through level 15, levels cost 17XP each; level 16+ costs more. As an extreme example, going from level 49 to level 50 requires 195XP, which is enough to get from 0 to level 11.
Smart use of the XP Extractor can make accumulating Mob Essence much easier, since lower levels take less XP and the XP Extractor produces one bucket per level regardless of that level's cost. Getting to level 30 takes 825 XP and once extracted, produces 30 buckets of Mob Essence. Pausing at level 15 and extracting, then getting to level 15 again takes 255XP twice, or 510XP, and produces 30 buckets of Mob Essence.