Oh! My ducats!

So, according to the Mike Mailway Trivia Bits in today's Seattle Post-Intelligencer--not on their web site, but I found it here, search for "Mailway" and select June 10--the cost of a gallon of crude oil, if a barrel costs $120.00, is $2.85. There are 42 gallons of crude oil in a barrel, you see.

According to this Department of Energy website, a 42 gallon barrel will "usually" produce "about" 20 to 30 gallons of gasoline, depending on the source of the oil. ("Venezuelan crude yields little gasoline (about 5%), whereas Texas or Arabian crude yields about 30% gasoline.") (Here's another website, from an oil consultant, a bit out of date because "I have to make a living." The numbers may be a year or three old, but the basics are the same.)(And another blogger's take on the subject. I personally doubt a one-to-one conversion of oil to gasoline is possible; a 100% efficient system sounds to much like perpetual motion.)

So the cost per gallon of gasoline is higher.

Then you have to pay for finding the oil (or more oil), then for drilling it, getting it to the refinery, getting it to the distribution center, getting it to the gas station...

And since much of it is found in the Middle East, which only doesn't have a problem with various forms of corruption because it is Business As Usual, you have bribes, kickbacks, and baksheesh to pay, at multiple point along the above "finding the oil... to the gas station" chain.

And, of course, taxes.

The Federal tax on a gallon of gas is 18.4 cents. ($00.184) It has not been raised since 1997.
According to this AP article dated June 8, 2008, the average state tax on a gallon of gas is 28.6 cents ($00.286.) In some states it's a flat amount, like the Federal tax, but others use complicated formulae, with the result that the state's tax revenues increase with the price of a gallon. According to this Seattle Times article from March this year, "At 54.4 cents per gallon, gasoline taxes for Washington consumers are the highest in the country, the attorney general's report said."

Oh, by the way, we pay county and city sales taxes, too...

Add in the cost of flying your senior executives to be scolded like naughty school boys by those paragons of virtue in Congress, and the cost of doing business ends up being pretty costly.

Not that I like paying $4.12 a gallon members' discount price at my local shopping center. I remember my father complaining about paying thirty-five cents--that's right, $00.35--a gallon on vacation one summer. But as long as we insist on having gas and plenty of it, and as long as newly prosperous people in countries where the private ownership of an automobile was unheard of just a few years ago* insist that they want to be just like those rich Amurrcuns, then crude oil, and thus gasoline, will be a valuable commodity. (I know I've heard the commodities markets contribute to the problem, but I've tried to keep to areas I more-or-less understand...)

And let us not forget that crude oil makes other things besides gasoline, such as heating oil, fertilizer, and plastics. Switching entirely to "renewable resources" will not mean an end to petro-chemicals.


Edited slightly to insert a missing hyper link, and to fix a couple of embarrassing typos.
*When I first reported to the Republic of Korea in 1982, farmer Kim was still using a beef critter of some sort to work his fields. By the time I left Korea in 2000, every Kim, Lee, and Park had a car and wasn't afraid to use it for the most trivial errands, resulting in gridlock like I've never seen in the US. Farmer Kim was usually using a souped-up garden tractor we called "One Eyed Dragons" or "One Eyed Buffaloes", and which could accommodate an infinitude of attachments.