I filled up my car today and paid a whopping $1.57 a gallon for the privilege. A lot of folks can’t seem to understand the underlying reasons behind the pricing of gasoline. Though I don’t work in the industry, due to certain relationships I maintain; I am able to shed some light on the matter. You see, the wife works for an oil and gas company. Need I say more? As any regular readers of my column will attest; that’s all the ‘in’ I need, to become an expert.
First of all, what is gasoline? Those of us in the industry will tell you, it is a by-product of petroleum. By-product means it’s a product we know you have to buy. So, what exactly is petroleum? The Oxford Essential Dictionary defines it as, “n. hydrocarbon oil found in the upper strata of the earth.” But what is oil? When used as a verb, the same dictionary defines it as, “v. to impregnate or treat with oil.” So there you go. You not only have to buy it, you get screwed, with oil. Now stay with me.
It’s not our fault. The wife and I were discussing, just this subject, while lounging on the cruise we went on, with part of her bonus pay. There are a lot of steps required to get the gas into your car. First, a lot of dinosaurs had to die. Then the earth had to bury them, crush them, heat them up and liquefy the whole mess. Unfortunately, instead of burying these deposits right under the local Conoco station, Mother Earth decided to bury most of them under the deserts of the Middle East. I guess she had to give them something to make up for the desolate landscape (it’s kind of like giving Wyoming-Yellowstone National Park).
After America built and established a booming oil economy in theses Arab countries, the Arabs realized what they had, and formed their own oil organization titled OPEC (Our People Expect Cash). OPEC sets the production amounts each country can produce, along with the minimum prices to charge. An organization such as this would be called a monopoly and deemed illegal in America. We would never allow this to happen in our free enterprise society. Okay, maybe once in a while, but never for anything important like airline travel, telecommunications, professional sports teams, computer software, energy suppliers or gasoline.
Next we have the shipping costs. I sent a box of Christmas presents to Florida this year and it cost something like twenty bucks. Can you imagine the cost to ship, oh a few billion barrels of oil from Saudi Arabia?
The rest of the world is complaining about the greenhouse effect. An acquaintance recently pointed out to me, the U.S is not only the largest consumer of petroleum products, but is the number one polluter on the planet. Of course, feeling I must stand up for, not only my country, but the wife’s employer as well, my learned and educated response to this tree-hugger was, “Go team go, We’re no.1.” He wasn’t amused, especially when I pointed out where the tires on his ‘Earth-friendly’ bicycle came from. I could have continued on about the oil on his chain, the grease in the axels and the paint on the frame, but he was already pedaling down the petroleum based asphalt road to Boulder.
You would think it would be cheaper to get our own oil out of the ground, but the Arabs don’t have the EPA to deal with, do they? I tell ya, you spill a couple million gallons of oil here and there and they get all huffy. And you wouldn’t believe the taxes we are forced to pay. We were discussing this over steaks at the Chophouse the other day. By the time our product gets refined and produced into the myriad products we all use today; there’s no telling how many pockets have been picked.
As you can see, the gasoline you put in your car is just one of many products that result from oil production. We like to consider ourselves a part of what we call, “The Circle of Life.’ Think about it, next time you whip out that PLASTIC credit card to buy some gas.
© Michael Ryan 2003
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