How much does gas cost to make?

[ls1 nova]

I am not a scientist so this will be in laymans turms. You start with crude oil. Crude cannot be run in vehicle. It must be refined. That takes x amount of energy to produce gasoline(where is that energy coming from, coal?). Then you have to ship it to where it is being used. More energy(Deisel run ships). It seems to me that no mater what fuel, alternative or existing it takes more energy to make the fuel than you get out of it. As science states, no perpetual motion. It just seems to me you will always need a greater energy source than you use, to run your vehicle, heat your house, ect. Just seems this so called energy crisis is a no win situation? Just my thoughts on a forum that has been closed.

[MrQuick]

depends on where you live...different additives and what not. If it makes you feel better, Iran still has to out source for fuel refinment.

This current energy situation is very complex. There is no "one" answer to it. From speculators running the stocks up, Opec cuts, uncertainty with Iran, 3rd would countries modernization creating more demand, etc etc...the list goes on. Much like our current "psychological" economical down turn we have to bare it out...hunker down and watch the spending.

Try to conserve and or cut down as much as you can.

[Damn True]

Well, a barrel (55ga) costs $140 or so or $2.54 per gallon.
Gas averages about $4.45 a gallon.
The oil companies earn about $0.09 per gallon.
The rest goes to expenses (production costs & taxes). So it costs them about $1.82 per gallon to bring you a gallon of fuel.


Still way cheaper than Scotch.

[RudeJester.s10]

$0.09 is all they make? Didn't I just hear about record profits, record sales, and some of the highest salaries in the world for oil company execs? I am old enough to remember when Reagan started a program that had them making synthetic fuel, but back then the cost to manufacter this was about $45 bux a gallon, and oil was around $15 dollars to buy, so it wasn't feasible then...but I wonder, could it be now?

[Damn True]

Yup. They make about $0.09 per gallon sold. The Federal Govt however makes $0.18 per gallon sold.

Who are the real crooks?

[parsonsj]

Uh... assumption check:

Does 55 barrels of light sweet crude turn into 55 gallons of gasoline? I'd bet not... but I don't know.

jp

[amx2334]

The states are in on it also
http://www.minnesotagasprices.com/tax_info.aspx
this may help understand the indusry
http://www.adventuresinenergy.org/index.html
most is transported via pipeline. ever wonder where they are?
https://www.npms.phmsa.dot.gov/searchp/newlogin.asp?search=Pub
pipeline runs almost under my old shop. never had a clue.

[gmorris]

What bothers me is the way everyone feels they somehow deserve dirt cheap gas. Why is that? Just because it has been cheap in the past doesn't mean it always will be or should be. Prices will go to what the market will bare. If you don't like the price, don't buy it. Nobody calls liquor distillers criminals because whisky costs a certain amount...or dairy farmers because milk goes up a few cents. The price of steel has doubled in the last few months and nobody complains. People just don't buy it if they can't afford it or think it costs too much.

There is no reason that gas should be so cheap that it encourages people to waste it. I realise that it isn't easy to just stop buying gas but there is no reason for the majority of people to own huge 4wd vehicles or drive to the corner store. I live in canada and made due for most of my life with 2wd vehicles.

I'm currently building a 700HP chevelle and I'm not complaining about gas prices. I know it will be expensive to run but it's a toy and won't get that many miles on it. We have a more economical daily driver for that. I'm not trying to call anyone out here, just raising a point that everyone seems to miss.

[Paul_J]

A barrel of oil is 42 US Gal. One thing to remember about oil co. profits is that they are derived from a lot more than Gasoline. Just think about all the products made from oil. I do a lot of work for Exxon/Mobil Baytown. One of the largest refineries in the US. It's a small city in itself and has it's own zip code. This refinery also includes the chemical plant as well. A lot of things come out of that plant. I also read that a while back the oil companies saw the potential profits from owning the convenience store attached to the gas station and began buying out the mom and pop stores. And how about finance charges on their credit cards? How many times do you get all those cool gadgets you can buy in the envelope with the bill?

Light sweet crude is the easiest to get gasoline from. They can "crack" whats left in a catalyst tower and get more. That black tar, heavy crude is the hardest to crack. So no, it's not 1 to 1. They make asphalt, heavy grease, plastics...ect with what's left.



Are these guys in it to make money? Absolutely. Every business should be. Are there crooked ones out there? Of course. Everyone saw what happened to Enron and they fell hard! (From within I might add.) I'm with MrQuick, it's a complicated equation.

[Damn True]

Uh... assumption check:

Does 55 barrels of light sweet crude turn into 55 gallons of gasoline? I'd bet not... but I don't know.

jp

No.

They wind up with some diesel, and other petro-stuff used to make god knows what. But since none of us can possibly know what the various percentages are I went with the simplest possible extrapolation based on known data.

[Damn True]

A barrel of oil is 42 US Gal.

Woops, you are right. They are working on UK gallons not US gallons.
My bad, feel free to rework the above math. It sounds like you might be able to make a more educated guess as to the per barrel gasoline yield as well. I'm interested to see how it works out.

[amx2334]

or dairy farmers because milk goes up a few cents
Here in the states milk prices are controlled by the government.They basically limit the farmers from selling milk at a profit.
I agree with the expecting cheap gas thing though. We had it pretty good for awhile.
The owner of my old shop had a bunch of covenience stores all over the cities. He used to say"theres no money in selling gas.Maybe a penny a gallon. It's the other items in the store that make money." He didn't like the pay at the pump for just that reason. How many gas stations do you see just selling gas?

[Paul_J]

The yield is based on what type of oil you get. Sweet crude is the easiest to make fuel out of and most expensive per barrel. The refinery has to adjust their processes based on what type of oil they get. I don't have yield numbers but do know that your not going to get 1 for 1.

What scares me the most about oil is that 80% of the oil supply is in the hands of government/state controlled companies. Pemex, Hugo Chavez, Middle East, Russian, etc... US Oil companies control less than 10%.

[gmorris]

What scares me the most about oil is that 80% of the oil supply is in the hands of government/state controlled companies. Pemex, Hugo Chavez, Middle East, Russian, etc... US Oil companies control less than 10%.

And yet US mayors are trying to ban the use of Alberta's "dirty" oilsands oil:hand: I guess Iran's oil is cleaner.

[Paul_J]

I'll take your "Dirty" Oil sand any day! I hope that resource can be developed to it's full potential along with so many others. It's to bad such a few here are standing in the way of that progress.

[Mathius]

What bothers me is the way everyone feels they somehow deserve dirt cheap gas. Why is that? Just because it has been cheap in the past doesn't mean it always will be or should be. Prices will go to what the market will bare. If you don't like the price, don't buy it. Nobody calls liquor distillers criminals because whisky costs a certain amount...or dairy farmers because milk goes up a few cents. The price of steel has doubled in the last few months and nobody complains. People just don't buy it if they can't afford it or think it costs too much.

It isn't that simple. First off, I don't think anyone feels they "deserve" cheap gas, but everyone wants cheap gas, because it's killing the economy, it's killing our own personal budgets. My last job I would put 600 miles a week on my car, and was putting $50 in the tank every two days. I moved closer, and got laid off, and my new shop is sending me to closer job sites, but gas has gone up $1/gallon since then. I'm now putting $75 in the tank everytime I put gas in, instead of the $50 that used to get me the same amount. So now instead of spending $600/month on gas, I'm still spending $350/month on gas, despite the fact that I'm travelling an insanely smaller distance every month.

Second, you can't just "not buy it". The whole country is setup on people driving cars. Most people don't live in New York where you walk everyone and have a studio apartment. Employers expect you to provide your own RELIABLE transportation, make it to work on time, and in cases like myself where I'm a contractor, drive to the job site.

I couldn't imagine the hell I'd have gotten in my old shop if I had gotten up early, rode a bike to work, and then been asked to go out in the field. Think they're going to pay me travel time on a bicycle when they ask me to ride it 30-50 miles to a job site? By the time I got there my day would mostly be over. Not everyone has to drive for their job, but the same thing applies. We had people calling off at my old job, retail, because they had car troubles and what not, and believe me that doesn't go over well.

Ever ride a bike to work when its raining out? Good times.

What you're talking about isn't practical.

Mathius

[MrQuick]

What bothers me is the way everyone feels they somehow deserve dirt cheap gas. Why is that? Just because it has been cheap in the past doesn't mean it always will be or should be. Prices will go to what the market will bare. If you don't like the price, don't buy it. Nobody calls liquor distillers criminals because whisky costs a certain amount...or dairy farmers because milk goes up a few cents. The price of steel has doubled in the last few months and nobody complains. People just don't buy it if they can't afford it or think it costs too much.

There is no reason that gas should be so cheap that it encourages people to waste it. I realise that it isn't easy to just stop buying gas but there is no reason for the majority of people to own huge 4wd vehicles or drive to the corner store. I live in canada and made due for most of my life with 2wd vehicles.


I'm currently building a 700HP chevelle and I'm not complaining about gas prices. I know it will be expensive to run but it's a toy and won't get that many miles on it. We have a more economical daily driver for that. I'm not trying to call anyone out here, just raising a point that everyone seems to miss.

Exactly!! Im gonna tell you why. Cause we are spoiled ass rotton. Everyone eles has been paying high prices and now its our turn. We have had the convienience of cheap gas for so long we have grown acustom to it. Not spoiled you say? How offen do you take the car to run an errand thats less than a block away? How offen do you talk the car out just for a drive with no purpose?

Next time you take the highway being going to work or a weekend, take a look around and see how many cars you see with one occupant. Waste...but im guilty too.

It strikes me funny how NOW everyone is talking alternatives, self reliance and conservation. Just like us to be too little too late. Wake up America.

[lowboy]

The only damn reason gas is so expensive in Canada and Europe is because of the outrageous government taxes levied on it. The reasons gas is so expensive in the U.S. are high taxes and the fact that we develop very damn little of our own crude due to the insane environmentalism. The U.S. has enough KNOWN oil reserves to last a couple centuries. The reason I'm mad about the high prices is because they don't have to be high. If we tapped into our own supplies, not only could we have $2 a gallon gas, we could also provide thousands of jobs and would stop sending billions to the damn arabs. gmorris, how can it not bother you that the majority of the cost per liter of fuel you buy goes to the fricken government? Socialism, ain't it grand!

[MrQuick]

Sorry LS1 Nova for getting way off track. But I believe it pertains to your question....sort of. LOL


yeah I hear you Lowboy but here's the thing.

Oil is a global commodity, meaning we will drill, process then sell to the highest bidder (China). We only use 32% of out crude. If there is someone out there to buy they will sell it higher. China will pay $200 a barrel with no hesitation. some thoughts (http://link.brightcove.com/services/link/bcpid1640183817/bctid1653635039)

Even if we do drill our own the price will not drop much. Prediction is to the $120 a barrel range...or hoping to the $70 range. The price is at $146 and its still being bought.

Iran is even looking for (inviting) foriegn countries (including the US) to drill and process not so they can help alleviate the soaring prices but so they can get in on the profiting train going on.

As far as actual fuel problems here, maybe a few more refineries and a generalized mix would help.

[gmorris]

Maybe gas should be expensive so we slow down on consumption and it lasts bit longer. If it takes high prices to slow the rediculous waste of fuel then I'm all for it. I think some painful times now and stretched budgets are worth it if it means our way of life can continue for an extra 10 years. Just think of all the non-gasoline uses of oil that aren't so easy to do without. All platic, rubber, lubricants, synthetic fibres etc etc etc are derived from oil. It's not just gas and diesel that disapear when the oil runs out...

And I know all about situations that require you to use fuel. I farmed for most of my life and lived 10 miles from the nearest town...and it was too small to buy most of the stuff you need. Not to mention fuel required to run equipment and trucks etc. I realise it will hurt but the alternatives aren't exactly pain free either.

[MrQuick]

Thats what the enviromentalist are thinking. It is a positive reaction.

Its funny that people took the threat of spending more than $4 a gallon over the threat of losing our ozone, having to live with 5000 SPF sun screen or living underground to conserve and start thinking about alternative energy.

[SHOUGHTON]

As bad as gasoline prices are it's the heating oil prices that chap my ass. I just paid $4.70 a gallon for #2 heating oil x 1300gal = over $6,000.0 just to keep the house warm. Not inculding the electric bill . 2yrs ago my oil bill was about $2000.00. #2 Heating oil and diesel are less refined and still cost more than gasoline. Trust me gasoline prices drive me nuts too (I commute 200mile/day to work) but the fuel oil prices really drive me nuts!:hand:

[MrQuick]

Yeah, I feel for you guys stuck with having to use heating oil. Gonna hurt real bad this winter.

[James OLC]

Sorry LS1 Nova for getting way off track. But I believe it pertains to your question....sort of. LOL


yeah I hear you Lowboy but here's the thing.

Oil is a global commodity, meaning we will drill, process then sell to the highest bidder (China). We only use 32% of out crude. If there is someone out there to buy they will sell it higher. China will pay $200 a barrel with no hesitation. some thoughts (http://link.brightcove.com/services/link/bcpid1640183817/bctid1653635039)

Even if we do drill our own the price will not drop much. Prediction is to the $120 a barrel range...or hoping to the $70 range. The price is at $146 and its still being bought.



We just hedged 3,000 barrels a day of our production with a high and low collar through the end of 2009. The low was $110 per barrel and the high was $206 per barrel -that shows you where the thinking for the next 18 months is. While it is doubtful that it will exceed the high collar it is equally doubtful that it will drop below the low.

[Jim Nilsen]

As bad as gasoline prices are it's the heating oil prices that chap my ass. I just paid $4.70 a gallon for #2 heating oil x 1300gal = over $6,000.0 just to keep the house warm. Not inculding the electric bill . 2yrs ago my oil bill was about $2000.00. #2 Heating oil and diesel are less refined and still cost more than gasoline. Trust me gasoline prices drive me nuts too (I commute 200mile/day to work) but the fuel oil prices really drive me nuts!:hand:


Time to spend the time and money on insulation anywhere you can add it. The old formula for payback on insulation probably can't keep up with prices. I would think that waiting to long will let the margin of savings as insulation prices rise.

Goodluck on making it last.