Sunday, June 29, 2008

Breakdown of cost of gasoline

Here is a breakdown of the cost of a gallon of gasoline.
If crude oil is $140 per barrel, the cost of the gasoline from that barrel is $71.96.
A barrel of oil is 42 gallons. Of that 21.5 gals of gasoline can be refined from the 42 gals.
That come to $3.34 per gal. for cost of oil.

Here is the breakdown from California on June 23 2008, to produce one gal of gasoline.

3.22 Cost of crude
0.18 Federal tax
0.34 State and local taxes
0.18 State exise tax
0.12 marketing and distribution
0.53 Refining cost and profit

4.59 Retail price

The taxes vary from state to state and the additives vary which is why California is higher.
The costs associated with refining and terminal operations, crude oil processing, oxygenate additives, product shipment and storage, oil spill fees, depreciation, purchases of gasoline to cover refinery shortages, brand advertising, and profits.

As you can see the main cost of a gal. of gas is the cost of the crude, $3.22. The second highest part is $.70 per gal tax. that puts the cost at $3.92 per gal before the oil company even gets the oil to the refinery.

The way to pay less is very obviously to lower the cost of the crude.
The cost of the crude oil in Jan 2007 was $62 per barrel. Just changing that has raised the price of gasoline from $1.42 per gal to $3.22, in 18 months.

Should we drill in ANWR?

According to the Department of Interior's 1987 resource evaluation of ANWR's Coastal Plain, there is a 95% chance that a 'super field' with 500 million barrels would be discovered. DOI also estimates that there exists a mean of 3.5 billion barrels, and a 5% chance that a large Prudhoe Bay type discovery would be made.
The map on the left shows Alaska, the orange part shows ANWR., the yellow part shows where we want to explore, and the part that would be developed would most likely be less than 15 square miles. The governor of Alaska, the house and senate reps for Alaska, and most of the residents of Alaska want the exploration and developement.
This area is also an area that contains flat grassland tundra, that no trees or any of nature would have to be damaged.
The other photo shows the impact of drilling at Prudhoe bay on the wildlife. No impact at all.
Lastly here is the estimates of resources in the area.
U.S. Geological Survey - 1980. In 1980, the U.S. Geological Survey estimated the Coastal Plain could contain up to 17 billion barrels of oil and 34 trillion cubic feet of natural gas.
This leaves no doubt in my mind we need to pursue this huge potential.
To find more info, check out this site.