Robin van Spaandonk wrote:
It takes more than 1 barrel of oil to make a barrel of gasoline.
That's true, but I think that is taken into account in the $0.40
"refinery cost." In other words, the refinery is purchasing oil.
Of course there are different fractions of oil too.
It takes varying amounts of oil to extract oil, too. The $100 is not
pure profit for the oil company. Much of the cost of extraction goes
to pay for oil to run the machinery and oil tankers. I have seen
estimates of the overhead ranging from 10% to 20%, depending on where
the oil is extracted and how far it is shipped. If overhead reaches
50% to 60% I doubt oil will be a practical source of energy. People
sometimes say there are huge amounts of "recoverable oil" left in the
ground, but sooner or later the energy cost of recovering it will
exceed the energy you get from it. Robert Park (of all people) found
an apt quote describing this:
"Franco Battaglia at the University of Rome put it this way: 'You can
buy an apple for one euro. If you really want an apple, you might pay
five euros. You could even pay a thousand euros, but you would never
pay two apples.'"
It is a crude estimate, but anyway I have seen various estimates that
the cost per gallon at the pump in the U.S. the cost per barrel
divided by 42 plus a dollar or so.
The estimate of $3.40 to $3.60 would only hold if the price
stabilizes at $100/barrel for a while.
- Jed
