Posted on 05/23/2008 12:59:00 PM PDT by decimon
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
The socialist coasts!
And California is dreaming up new ways to tax us because they don't get enough in taxes...
... it's the spending, stupid!
Divide $131.90 by 42
You don’t get 42 gallons of gasoline out of a 42 gallon barrel of crude. You get about 20 gallons of gasoline and the remainder is in the form of diesel, jet fuel and other products....
You're on the right track, but still too high.
Crude oil is not crude oil. It comes in countless grades and qualities which determine how much gasoline can be refined from each barrel. Some are much better than others.
A good average would be about 19 gallons out of a 42 gallon barrel.
This was an amazingly accurate article issued by the AP, though. I never would have believed it.
It even accurately stated that many refineries are losing money right now, something which the majority of Americans would automatically dispute.
Don't forget that for every $1.00 in profit the gas company makes, they pay $3 in Federal taxes and duties! That's ABOVE AND BEYOND the basic tax rate on fuel...
The Feds get a direct cut from the consumer (the direct tax per gallon) AND an indirect cut via taxation on the oil company. In actuality, the Feds make around $0.50 per gallon, and the oil companies make around $0.08 per gallon.
States and local municipalities just add a bigger take...
It's worth remembering that AP is a news service and not a news outlet. The subscribing news outlets (more like partners, I think) choose which of the many news reports to print.
Accurate point, but the author, John Porretto, is the AP Business writer.
I loved my part of the legal field, buying and selling tankers, but what a headache for the rest of the company. I loved our captains and crew most dearly. Their stories, especially the one when we picked up the refugees (which I threw a tantrum about passing by [but they were afraid of piracy]), but they were as fond of me as I them and I said if they're pirates drop them overboard, but if they're refugees bring them to safety, and we did. It was a great job all around.
This might be useful:
“WWW.ENERGY.CA.GOV / GASOLINE / WHATS IN BARREL OIL
What’s In A Barrel of Oil?
Petroleum Products Yielded from One Barrel of Crude Oil in California
Product Percent of Total
Finished Motor Gasoline 51.4%
Distillate Fuel Oil 15.3%
Jet Fuel 12.3%
Still Gas 5.4%
Marketable Coke 5.0%
Residual Fuel Oil 3.3%
Liquefied Refinery Gas 2.8%
Asphalt and Road Oil 1.7%
Other Refined Products 1.5%
Lubricants 0.9% “
Total volume of products is close to 50 gallons due to addition of refining products and ethanol.
If you mean that, then you might want to consider reading the essay before you comment further.
Exxon doesn't pay $131.90 for the oil it produces.
No. They don't. But they could sell that oil they produce on the spot market for $131.90. So, what would you have them do? Sell it to us for less than others would pay?
Moreover, Big Oil produces only 25% of the crude it refines. Much of the rest is bought on long-term contracts -- from suppliers like OPEC.
What must they charge in order to budget replacement of the oil they consume?
I believe in the free market.
I don't have to misrepresent profits/costs in the oil industry to back up my beliefs.
Rush posted a link about what’s made from a barrel of oil:
http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.html
I follow your premise but your calculations are highly flawed but easily corrected. A barrel of crude is 42 gallons and due to chemicals added during the refining process yields a little over 44 gallons of product. However, only 19.5 gallons of that 44 gallons of product is gasoline.
The truth is it is a complicated market and industry, much more than the average person even begins to comprehend.
The number of oil companies who both drill, refine, and market the product are very few. There are literally thousands who drill, a few dozen who refine, and hundreds who market retail gasoline in the US.
Each of those segments compete against each other, which is a good thing. It keeps all of them honest.
Today, the drilling and producing side is making all the profit. The refining and marketing arms are maybe breaking even or losing money in most cases.
In different business cycles the reverse is often true.
It all depends on what you want to call an “oil company.” Is it the Shell station down the corner? Is it the Valero refinery? Is it Bubba Joe and Mary who operate a stripper well and request a truck to pick up the oil every three weeks?
Each of them have different profit or loss margins depending on which they are.
There is no misrepresentation. It’s all out there for everyone to see. Those who do not want to examine the facts and prefer to believe in an evil plot may do so, but that is an alternative reality.
The misrepresentation is to only show cost/profit/loss from the refiner's standpoint.
That's what I was pointing out.
Refiners are not doing well at all.
I don’t think they’re making eight cents a gallon profit at the refining level today.
In fact, unless they’re incredibly efficient, they’re losing money with each gallon they send to the gas station.
If you’re only on the E&P side, upstream, you’re probably doing pretty well on that segment. Every new well you drill is a gamble, though, and it’s more expensive than ever to drill a new well. If you strike out and drill a dry hole, that could be millions of dollars for nothing.
It happens all the time.
So, is the oil industry raking in massive profits? It kinda depends who you are and what your place is in the overall scheme of things.
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