Oil companies are in the news as they report record profits each quarter. Oil company executives, in the past, have been led in to committee and asked to justify these record profits. These are true profit statements – earnings after costs – however, their profit margin is a percentage of barrel cost and as the barrel prices rises so do profits.
3 to 4.3 Billion Barrels of Oil in North Dakota and Montana
They are currently producing (yearly) around 110 million barrels from the Bakkan which is 301,361 barrels per day. Approximate yield of gasoline per barrel is about 47% which puts production of gasoline at around 135,612 barrels per day or 1.5% of our gasoline consumption figure per day. US lease condensate production is approximately 498,630 barrels per day or 5.4% of daily consumption. US domestic crude production is approximately 5,512,000 barrels/day and taking an average of 47% gasoline recovery per barrel yields 2,590,640 barrels/day of gasoline which is approximately 28% of the consumption. Therefore total domestically extracted gasoline is approximately 34.9% -3.23 million barrels.
A volume of a “barrel” of crude is 42 gallons. Yields vary depending on composition of the crude and the processes uses in the refinery. But this is a typical result from a larger refinery:
23% heating oil/ diesel fuel
18% petrochemical feed stock—products derived from petroleum principally for the manufacturing of chemicals, synthetic rubber and plastics
10% jet fuel
3% asphalt = 105% – a 42 gal barrel of crude produces about 46 gallons of petroleum products thus a 5-6% gain in volume is realized. This 5% gain in volume is a result of heating and cooling plus the addition of any solvents in the refining process.
The national average retail price of a gallon of regular gasoline in April 2011 was $3.80. The four main components of the retail price of a gallon of gasoline, and their share of the total price in April are:
1.Crude Oil — 69%. The cost of crude oil as a share of the retail price varies over time and among regions of the country. Refiners paid an average of about $110.12 per barrel of crude oil, or about $2.42 per gallon, in April 2011.
2.Refining Costs and Profits — 16%
3.Distribution, Marketing, and Retail Costs and Profits — 5%.
4.Taxes — 10%. Federal excise taxes were 18.4 cents per gallon and State excise taxes averaged 22.60 cents per gallon.
Wholesale price gasoline: 3.00 gal
Wholesale price diesel: 3.50 gal
Wolesale price AC: 2.00 gal
Why Should We Care - Big Oil Should Be Demonized!
Well, corporate welfare should be ended; however, true capitalism which promotes competition should be protected. Those businesses who “game” the system and collect subsidies that are taken advantage of simply because they are available – should be stopped. Just remember the next time you hear a politician screaming about oil profits or a union leader spouting disparaging comments about capitalism or what capitalistic economies do to labor just remember to consider where and whom benefits from the very profits they condemn. We all have a piece of the pie in one way or another.
Facts and Sources:
US Total exports 2,024,000 barrels per day.
Natural gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. It condenses out of the raw gas if the temperature is reduced to below the hydrocarbon dew point temperature of the raw gas. The natural gas condensate is also referred to as simply condensate, or gas condensate, or sometimes-natural gasoline. This natural gasoline is routinely burned without issues by oil company owned vehicles in this “natural” state.
Gasoline From Natural Gas According to the U.S. Energy Information Administration, in 2006 the USA used 9.253 million barrels of (motor) gasoline each day. On the other hand, there were 811 million barrels of natural gas liquids produced in the USA in 2006, including both condensate extracted at the lease (182 million barrels) and liquids extracted in later processing (629 million barrels.) This is equal to 2.222 million barrels per day, which is around 24% of the gasoline consumption figure. The lease condensate production alone is equal to 0.499 million barrels a day, 5% of the consumption figure. Also according to the EIA, in 2006 refineries in the USA used 5563 million barrels of crude oil (15.24 million barrels per day) and 180 million barrels of natural gas liquids (0.493 million barrels per day, or around 3% of the crude oil input volume.)
Proof that capped wells are being re-worked and put back online.