Foreign Profits by Country Per Dollar/Gallon of US Gas
Category: Reference, Education and News > Current Events
Asked by: ken3141-ga
List Price: $50.00
28 Aug 2005 18:25 PDT
Expires: 27 Sep 2005 18:25 PDT
Question ID: 561576
We've been having some arguments about who makes money off of high priced gasoline. Here's _why_ I want to know the answer: I have started hearing a new argument from groups like Set America Free that "we're paying for both sides of the war" by having such a high dependency on foreign oil. The interesting part of this though, is that these groups are mostly staffed by neo conservatives, not environmentalists. Anyway, their premise is that by having low vehicle fuel efficiencies, we're paying large sums of money to non-US friendly countries. Whether or not one subscribes to this line of reasoning is not the question. The question is, on an percentage basis per country, how much does each oil producing country make in profit(in actual cents) from every gallon of gas sold? Now, I fully realize that this will in turn depend upon how expensive the gas is, but let's just pick a price and go with it. I pick $2.50/gal. The answer should look something like this (although I'm sure I don't have my countries in the right order): ---------- Per $2.50/gal of gas: A. Saudi Arabia get $0.10 B. US gets $0.05 C. Kuwait gets $0.03 D. Venezuela gets $0.02 etc etc -------------------- So, what you need to do, is: A. Back out from a $2.50 gallon of gas what the approximate cost/barrel of oil is. Yes, I know this is only an approximation. B. Figure out from that barrel how much of the cost goes to the seller (in other words, does a seller really get $60 for that gallon of oil?) C. What the breakdown is percentage wise per oil producing country (e.g. Saudi Arabia 60%, US 20%, Azerbajain 3%, etc). Assume that every gallon of gas sold is a blend from oil coming from all sources in the percentage to which they supply the world. D. Calculate it out. ***List the answer for the producers for the top 95% of the oil producing countries (in other words, list the countries that supply 95% of the oil, and you can lump the rest into "other.") ***List your math and your sources. Again, I realize there are assumptions made in these calculations, but I'm sure they'll be mildly accurate. ***Bonus points if you can find a semi-reliable relationship between the cost of a barrel of oil and the price of gas (cheapest unleaded). Of course, none of this will actually address the issues implied by the impetus for this question, as that is a matter of political impressions. But I still want to know. Perhaps I'll do a follow on question if we get interesting numbers. If you think this question is underfunded, let me know.
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Re: Foreign Profits by Country Per Dollar/Gallon of US Gas
From: myoarin-ga on 29 Aug 2005 04:57 PDT
An interesting question, but I think there is still some confusion. If Russia (your example) produces 10% of world crude oil, that does not mean that 10% of the crude used to make gasoline in the States comes from Russia. Maybe no Russian crude oil is sold the America. And there are different types of crude, so possibly imports from some places are less - or not - used to produce gasoline. But maybe you are satisfied by an assumption that this is not the case - and also with an assumption that all moneys left in the countries may be available to "pay for the other side of the war", which is not true, of course, since some of the families raking in the money are are putting some of it aside for "personal use". Omniverous is on the right track (of course), we have to know how much each country receives on a barrel of oil exported to USA and the amount exported relative to the total of imports AND US crude and its price, since we have to include USA in the subsequent calculations. Then we need to know how much of this total crude is used to produce gasoline. We don't have to worry about a hypothetical blend of sources in every gallon; it all gets to the pump somewhere. (An average cost of refining, distribution, profit and everything else except the cost of crude that also goes into the price at the pump before taxes has to be calculated, so that we know what portion of the pump price relates only to the cost of crude oil.) (Parentheses added later. Myo) But this may be found out from a source on gasoline producing that gives the volume of gasoline produced from a barrel of crude oil, thus allowing a calculation that if so much gasoline is sold, that represents so much crude oil from all sources (which we have already identified), allowing a calculation of how much Iraqi crude oil is refined and sold as gasoline, and we can figure out how much this cost. We are using some pretty sweeping averages, but we could continue then to assume that the cost of that Iraqi crude divided by the number of gallons of gasoline it produced gives us a pennies at the pump value, and then do the same for other countries. Unfortunately, petroleum refining itself uses a lot of energy. But maybe the source (to be found) on gasoline production mentions this and the number could be included in the calculation. Hmm, that may not be clear, or correct, and it is certainly not an "answer". Even if this is a possible approach, there is still a lot of research necessary to put numbers into the calculation. Myoarin
Re: Foreign Profits by Country Per Dollar/Gallon of US Gas
From: elids-ga on 29 Aug 2005 06:55 PDT
you should also keep in mind the very many 'kinds' of oil, for instance; A BTU of sweet oil is fundamentally different than a BTU of sour oil. Sour oil is contaminated with sulfur and requires special refineries with higher energy costs. Some giant oil fields (e.g., Manifa in Saudi Arabia) are "virtually unusable" because they are contaminated with hydrogen sulfide and vanadium (a heavy metal). http://www.prospect-magazine.co.uk/highlights/essay_fleming/. About a third of the natural gas produced in the lower-48 states is known as "subquality". That is to say, it contains nitrogen (N2), carbon dioxide (CO2) or hydrogen sulfide (H2S) in amounts that preclude its use without being processed to remove these contaminants or blended with volumes of less contaminated gas. Between one- third and one-half of the discovered gas reserves in the lower-48 states also falls into this subquality category. Since the processing adds to the [energy] cost of production, subquality gas is not typically a producer?s first choice. Once high quality reserves are depleted, however, producers will need to implement cost-effective methods for bringing greater volumes of subquality gas to the marketplace. http://www.gri.org/pub/content/feb/20000224/110827/gtwnt00b-toc.html. so no one formula would apply to all.
Re: Foreign Profits by Country Per Dollar/Gallon of US Gas
From: jasilvi-ga on 01 Sep 2005 09:54 PDT
You are asking the right question, but respectfully in the wrong pretense. Having worked for the Pegasus Oil Company and understanding the pricing structure, the money made per country is determined by the bid at close on the NYSE and/or by a formula that is set prior to the shipment of the crude. Crude comes from the ground, and depending upon who owns the rights of the minerals receives the royalty when the crude is offloaded. Example: The Pegasus/Tiger corporation and Saudi Aramco ship 1 million barrels of crude to their refinery in Baytown. At 70.00 per barrel, the cargo is worth 70 million dollars. Should Pegasus/Tiger and Aramco each own 50 percent of the shipment, they split the 70 million equally. 35 Million to Saudi, 35 million to Pegasus/Tiger Upstream Corporation (E&P for you non pegasusmobil folks). The cost of refining the crude now falls under the prudence of Pegasus/Tiger Downstream Corporation (refining and marketing) which pays the 70 million for the Crude. Now, here is where the profit is extended. I pay myself for my product. My cost is estimated at 6 dollars per barrel as to what I purchased it for or estimated through accounting. Today I will get 70.00. This is why many corporations in the 80?s were buying companies with reserves. Imperial Oil was purchased by Mobil who was later purchased by Exxon to become ExxonMobil or the old cornerstone of the standard oil trust. The Imperial Oil deal set the price at 6 dollars per barrel and reserve estimate at 7 billion barrels (If I recall, however you may correct myself should I be wrong). If I own the complete process of exploring, drilling, extracting, transporting, refining and marketing the crude into gasoline, the final cost is (approx) 37 cents per gallon or about 15 dollars per 42 gallon barrel of gasoline. 1 barrel = 42 gallons (Not 55 gallons)........Tack on a 255.00 dollar per 10k delivery fee and you begin to comprehend the profits within the Oil and Gas Markets. The inflated profits are experienced when the bidders and traders of crude?. think that the world has ended and that their crude is made of gold and with no competition, panic sets in and the price skyrockets. The standard mark-up on each gallon refined (should you have to buy the crude on the spot market) is approximately 20 cents. Keep in mind that 38.4 cents is the average tax that each state benefits from. Some state excise taxes are as high as 61 cents and some as low as 34 cents. Take your pick !!! Add additives and the cost varies. Their are currently 17 blends of Gasoline produced !! The amount of money that a country makes is based solely on the number of barrels shipped and who owns the product. This is why countries fight over Crude Revenues. The additional profits are decided (as stated) on your operational costs. If you own the crude, then these are great times (especially for the big Oils). Should you only refine the crude, your profits are marginal due to your price contract lock-ins. Should you explore for the Crude, the costs are estimated based on each company E&P costs. Numbers by the game: Approx Costs Owner and refiner of the Crude: Total Cost is approx 37 cents per gallon the refinery adds approx $255.00 charge to the stations per 10K gallons delivered. Spot market Purchase and your Refining of the Crude: Operating costs plus barrel costs plus station delivery costs. The problem is not with the capacity of this country, the problem is with the war. With the US now committed to the war, the US Supreme Court stated that George cannot attach the cost of the war to the US Budget. When the price was nose diving downward to 40 dollars per barrel earlier this year, everything was starting to stabilize until the US courts ruled against George, effectively cutting up his credit card on war purchases and charges. In the past, the Oil Cartel?s would cheat to extend their profits, however today, they adhere to strict quotas. This is why Gasoline is no longer cheaper. Crude oil has a shelf life of approximately 6 months. If you really want to get hot under the collar, check out the history of Synthetic fuels. Look for AGC 21 Technology (Advanced Gas Conversion 21 Technology) or ?M Gasoline Technology? under the heading of New Zealand Synthetic Fuels which was created by the OLD Mobil Oil Corporation (Pennington, NJ) in 1985 and at 30 dollars per barrel. Today the cost is down to 25 dollars per barrel. Question to any reader. Why would you sell a product at 25 dollars per barrel when you can get 70 dollars for that same barrel ?? This is business!! I do not agree with the Oil?s in pricing structure (when it hurts the nation as one) even though I had worked for them for nearly 21 years. But again, this is business!! Capitalism and Democracy does not mix !! It is Oil and Vinegar and without the proper checks and balances, this is the end result. OIL is a commodity, it is traded !! When a product is traded, you can only ensure price competitiveness through competition and not mergers. When Exxon and Mobil were permitted to merge, the old folks knew that gasoline would hit at least 2.25 per gallon. 82 thousand jobs were lost and I am sorry to say, we were right. Understand the value of Gasoline. Where can we develop a fuel source that can propel a vehicle in weight (on average) at 3000 lbs??.for about 2 cents per mile? This the question that needs to be challenged !! And trust me, I have worked with some of the most brilliant minds in Energy?? and to-date, no one has yet to answer this question????. I hope that I have answered yours....... Information to research: http://WWW.chemlink.com.au/gtl.htm GTL Gas to Liquids Technology worldwide Synthetic Fuels GTL (Gas to Liquids) 2700 Synthetic Fuel Patents owned by ExxonMobil M-GASOLINE Process or Technology (Mobil1 Oil and Synthetic Gasoline) Synthetic Crude Oil /Syncrude Fischer-Tropsch & Slurry Process
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