This is my first attempt at "crunching the numbers" so im sure i messed up somewhere. Please let me know what you think
For me, the question lies in the numbers. ill do my best to be thorough, so let me know if i missed anything
May of 2008 - average barrel of oil: $117.40
Lets break each barrel down
A barrel of oil yields these refined products (percent of barrel):
47% gasoline for use in automobiles
23% heating oil and diesel fuel
18% other products, which includes petrochemical feedstock—products derived from petroleum principally for the manufacturing of chemicals,
synthetic rubber and plastics
10% jet fuel
(Percentages equal more than 100 because of an approximately 5% processing gain from refining.)
Which is better represented by:
We can see how many gallons of each "fuel" is contained within each barrel (rough estimates, again, vary by refining gains/losses)
Since "other" encompasses a wide variety of things (crayons, wax, plastic bags, etc)
We'll concentrate only on fuel
Lets use some recent data and a picture or two:
gasoline and diesel - the two heavy hitters per each barrel of crude oil
taxes = 37 cents per gallon
Distribution = 19 cents per gallon
Refining = 37 cents per gallon
Crude = $2.83 per gallon
$3.76 cost (usually lose 1c per gallon in each major oil company)
taxes= 43 cents a gallon
distribution = 22 cents per gallon
refining = 93 cents per gallon
crude = 2.84 per gallon
$4.42 per gallon
So - lets recap so far.
Already - we are up to
4.42 per gallon of diesel - and you can get 9.21 gallons per barrel. So $40.71 per barrel for diesel
+ 3.76 per gallon of gasoline - and you can get 19.15 gallons of gasoline per barrel - So $72.00 for gasoline per barrel
72+40.71 = $112.71 (getting very close to that cost of a barrel)
and we have expended roughly 70% of the barrel on diesel and gasoline.
30 % to go for each barrel, and we are 96% of the way there for the cost of the barrel
Average = $4.09 per gallon ( Source
3.82 gallons of jet fuel per barrel = $15.62 per barrel
LPG fuels cost (roughly) half that of gasoline. ( Source
So if gasoline is 3.76 a gallon, we'll call LPG fuels 1.88 per gallon
for a total of
1.72 x 1.88 = $3.23 per barrel of oil
even at a "low cost" for heating homes, as most oil companies put it, it still costs ~ $3.00 a gallon for heating oil
so 1.75 x 3.00 = $5.25 per barrel of oil from heating oil
Heavy fuel oil
A little trickier to figure, but there is actually a scary technique involved
(you divide the USD per metric ton of the fuel oil, by 6.66
you get price per barrel for Heavy fuel oil)
which in this case is rounded off to $50 for arguments sake
(its actually higher, but these figures only go as far as 2006)
So - a final recap:
Gasonline - $72 per barrel
Diesel - $40.71 per barrel
Jet Fuel - $15.62 per barrel
LPG - $3.23 per barrel
Heating Oil - $5.25 per barrel
Heavy Fuel Oil - $60 per barrel
So - if i am doing this right (
) that comes to $196.81 per barrel, and we still have 7.27 gallons of "other product" (or roughly 10% of the
barrel of crude oil) to go.
Other product encompasses many things (like garbage bags, wax, crayons, etc) so ill do the oil companies a favor and just exclude this all together,
cause i dont feel like finding out what "other" encompasses entirely.
196.81 dollars per barrel is a 67.7% markup of 117.40
and we havent even used the entire barrel yet.
So - after we expend the cost of each product from every barrel, we are left with $79.41 per barrel.
The united states (in 2007) consumed 7.5 billion
barrels of oil.
$595,575,000,000 (billions....with a B) is what you get when you take the "overage" (79.41) times 7.5 billion barrels.
Now, of course, not all of that is profit. You have to pay your employees' hourly wages, the salaries, donations, investments, etc etc etc
and some estimated figures still put the profits for 2007 in the billions of dollars
18.7 billion (profit)
surpasses 40 billion (profit)
Those are just the two biggest, there are more (my eyes hurt...)
Thats two companies, profiting 58.7 billion dollars, on one year, beacuse we're paying record prices at the pump.
What is their excuse for this?
They claim that thier % profit is "in line" with other businesses.
lets not forget that oil companies get tax subsidies, as well.
interesting article snippet
lawmakers were far less sympathetic to the executives.
Markey hammered Exxon's Simon over the company's investment in renewable energy. "Why is Exxon Mobil resisting the renewable energy revolution?"
Simon said Exxon has given $100 million to Stanford to study renewables. "$100 million?" said Markey. "But you made $40 billion last year."
So are their "profits" in line with other companies?
Until you consider their tax incentives, breaks, and write-offs.
And what about all this money that they're supposedly investing in new technologies since God knows when? (or atleast so they claim)
Well, two comments on that.
1.) - read the snippet above. They invest 100 million, but still profit 40 billion. By the way - a lot of tier investments are tax write offs under
the 'renewable energies' tax code.
2.) - Why hasnt gas changed - at all - in the last 10-30 years? The same gas i pump in my car today - is the same gas i pumped 10 years ago. If
billions gets invested, where's the results?
if you took the amount of money that big oil 'claims' to invest in new technology for better energies, and invested it into Cancer, or AIDS
research, im sure we'd have a cure by now.
My overall opinion.
They will not lower prices by drilling domestically. They already have a surplus as it is, read the other articles here, and it'll show you that
they are at 100% capacity in all refineries, and set on the rest of it.
They make 40 billion in one year, and im paying 4.00 a gallon, which they blame on saudi arabia
usually - in business, when "cost goes up" and "price goes up" then you still have "the same exact profits"
not in this case.
40 billion profit is a record for any company.
and 4 dollar a gallon is a record for this nation.
But what can i do about it besides post this column?
I'd write my congressman, though he'd probably laugh at me while he's opening his 'incentive check' for exxon mobil.
I hope you find these facts interesting. I put a lot of work into it - and had to re-do it after the 'draft' option failed me again.
I eagerly await your comments