In this paper, we explore physical layer cooperative communication in order to design network layer routing algorithms that are energy efficient. We assume each node in the network is equipped with a single omnidirectional antenna and that multiple nodes are able to coordinate their transmissions in order to take advantage of spatial diversity to save energy. Specifically, we consider cooperative diversity at physical layer and multi-hop routing at network layer, and formulate minimum energy routing as a joint optimization of the transmission power at the physical layer and the link selection at the network layer. We then show that as the network becomes larger, finding optimal cooperative routes becomes computationally intractable. As such, we develop a number of heuristic routing algorithms that have polynomial computational complexity, and yet achieve significant energy savings. Simulation results are also presented, which indicate that the proposed algorithms based on optimal power allocation significantly outperform existing algorithms based on equal power allocation, by more than 60% in some simulated scenarios.