all quiet on the merlot blog
recently we have had a bit of increased activity in the office (new business is the life blood of the PR world as someone brilliant often says) and i have noticed a decrease in the number of posts. so i wanted to make sure that our little blog keeps chugging along and i wanted to put something up for us to read about.
Today while taking a lunch trip to do some business we had to stop by the gas station (and by gas station i mean the blood and money sucking place that we all have to go to to be able to continue to go to work and the grocery store and anywhere else we need to go) and Matt made a purchase in the amount of $73 DOLLARS to fill his nissan with gas.
RIDICULOUS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So we had a bit of a discussion about that and i wanted to put up a few links that might help people realize that we are getting forked at the pump by oil companies and speculators. I will do this in a question and answer format for the ease of conveyance.
Q. the price of a barrel of crude is rising so isn’t the price of oil just getting passed on to us?
A. No, read this to get some more insight as to where the price comes from
Q. What about the supply, isn’t oil getting more scarce?
A. According to my calculations from this data there is almost 1000 years of oil that is down there
Q. How much does it cost to get a gallon of gas from that oil that is pulled out of the ground?
A. This one requires a bit of math, but we need to make use of the graph in this pdf to explain it. So the bar graph says that the price per gallon of gas in crude oil is $1.56 but that is what the crude is going for on the market, not what it costs to get it out of the ground and YES, the oil companies are the ones getting it out of the ground, so they are not paying anyone for the oil, its just their cost. with the information we have up above that a barrel of oil has about 42 gallons in it that means that [(42x1.56)-20=45.52] the oil companies are (or were since this data is from may of 2006) making 45.52 dollars a barrel. that is about 200% profit. if you extrapolate that to today using the same distribution of cost across the two variables (because the taxes on gas haven’t changed) and assume that the price of gas is 4.50 a gallon [(42x2.92)-20=102.85] they are now making more than 100 DOLLARS A BARREL!!!! 500% PROFIT!!!
if you have any more questions that i haven’t answered here let me know and i will do my best to fill you in.
June 13th, 2008 at 2:54 pm
While the run-up in recent oil prices is most likely a result of speculators and the falling value to the U.S. dollar, there is some debate about long-term supply.
“Proven” reserves are used for political-economic purposes, leaving their authenticy up for debate. http://en.wikipedia.org/wiki/Oil_reserves#Proved_reserves
Peak Oil is has also gained a lot of attention lately, from the doomsayers: http://www.lifeaftertheoilcrash.net
To a more balnaced view: http://en.wikipedia.org/wiki/Peak_oil
In either case, invest in Solar and then go electric (says he who gets 15 mpg)!
June 13th, 2008 at 3:39 pm
Completely agreed on the solar angle *cough*SMA*cough*, and i would throw in wind, and any renewable energy source! And yes, the “proven” reserves are very political and up for debate, the point of that link was to show that there is no shortage of oil. In fact, there are so many places that can be drilled that are NOT being drilled even here on American soil.