| OIL | <– Date –> <– Thread –> |
From: Brian E. Buxton (BrianBuxton BuxtonMotorsports.com)
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| Date: Sat, 9 Aug 2008 11:13:36 -0700 (PDT) | |
Here is something I put together about a month ago - had been wondering
about where fuel prices came from and how much profit there actually was
in oil. As with many other issues (minimum wage, "big" business, etc.)
the issue comes down to TAXES!!
Because of the high cost of gasoline over the past 6 months, I have been wondering exactly what it costs to drill for, pump, transport, store, refine, mix additives into and transport gasoline to a gas pump where it can be purchased by you and I. After a little research and reading a great article by Csaba Csere in the Aug. 20008 Car & Driver I have a little better understanding of the entire process. I found it very interesting and thought that you might as well. I will use ExxonMobil Oil Company as my example ...
American oil companies actually own very little of the 388.6 million gallons of oil that we Americans utilize everyday. They have to buy crude oil on the open market in order to have a product that can be refined into gas, diesel, jet fuel, motor oil, heating oil, etc. A barrel of crude oil contains 42 gallons of oil, and as of July 3, 2008 costs $145.29 per barrel. That means the raw material that the oil companies purchase currently costs roughly $3.46 per gallon.
Based on figures from its 2007 annual report, Exxon made approximately 58 cents per gallon for finding / buying oil, pumping it out of the ground and into storage tanks, transporting it to a refinery, turning it into gasoline, and distributing that fuel to gas stations all over the US. Of that 58 cents of profit, Exxon paid about 25 cents in income tax (they pay 41% of their taxable income to the US Government!) - (http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion). The Federal Government also collects 18.4 cents of excise tax per gallon. The state of Michigan charges an additional 19.875 cents per gallon of excise and environmental taxes, along with 24 cents of sales tax (at $4.00 / gallon). Including the sales and excise tax, Indiana residents pay 50.1 cents per gallon on gasoline, and 69.2 cents per gallon on diesel.
So while ExxonMobil makes 33 cents per gallon of gross profit (without the inclusion of paying their employees and the other costs of being in business), the Federal Gov. & State Governments takes 87 cents per gallon of gas sold in MI, 75 cents per gallon of gas sold in IN, and a national average of 62 cents per gallon of gas sold in the US (http://www.indianagasprices.com/tax_info.aspx).
I have heard many people complain that the high fuel prices are the fault of the "greedy" oil companies, or President Bush, etc. But nobody ever looks at the issues that really affect the price of fuel. The falling value of the dollar. Looking at the year 2000, the Euro was worth 82 cents compared with the US dollar, and crude oil was at approximately $30 per barrel, or 36.5 Euros. In 2008, because our elected officials in Congress, the Senate, and local Governments (the President has little control) have degraded the value of the dollar by decades of out of control deficit spending and enacting various future programs that have no fiscal support, the Euro has now appreciated from 82 cents to approximately $1.60. In comparison, while the cost of crude oil has quadrupled in dollars (from $30 to $145), it has barely doubled in Euros (from 36.5 to 80). If the US dollar had maintained parity with the Euro, crude oil today would cost $80 a barrel and gas would be under $3.00 per gallon.
The problem is not the oil companies - they give away almost half of their profits in taxes, and what they do earn they deserve. Companies like Exxon are American companies that are largely owned by American stockholders, who employ ten of thousands of white and blue collar Americans and pay them very high wages. They help to maintain the high standard of living the US enjoys, as well as the technical and technological superiority that the US enjoys over the rest of the world.
The problem isn't OPEC or the oil producing companies of the Middle East. Why would they want to produce more oil? They are in business to make money, and they have a product that everyone wants and needs. The price of oil is up, which means the profits they fairly earn are up. Do farmers who grow corn sell their product for $3.00 a bushel when the market pays $4.00, and is up from $2.00 per bushel last year? Do movie stars cut their $20M per picture salary to make theater tickets more affordable? Sports figures give back half of their multiple million dollar paychecks to make sports tickets cheaper? So why should oil producers flood the market, lowering prices and cutting into their profits?
My point in all this? Don't complain ... Vote. This is an election year. Get interested in US politics and educate yourself on how we are affected by the laws that our elected officials have been enacting for decades. Vote for the officials who will reduce spending, balance the US budget, and do what is necessary to keep our country and our dollar strong. Take a look at how much our IN Governor Mitch Daniels has done for our state in the past couple of years - balanced our state budget, reduced spending, lowered property taxes. It does affect you, and you can make a difference. Change can occur!
President, Brian Buxton Enterprises, Inc.
Nationwide Enclosed Auto Transportation
www.BuxtonMotorsports.com/storage-transportation.php
B
Want lower fuel prices? VOTE!
Because of the high cost of gasoline over the past 6 months, I have been wondering exactly what it costs to drill for, pump, transport, store, refine, mix additives into and transport gasoline to a gas pump where it can be purchased by you and I. After a little research and reading a great article by Csaba Csere in the Aug. 20008 Car & Driver I have a little better understanding of the entire process. I found it very interesting and thought that you might as well. I will use ExxonMobil Oil Company as my example ...
American oil companies actually own very little of the 388.6 million gallons of oil that we Americans utilize everyday. They have to buy crude oil on the open market in order to have a product that can be refined into gas, diesel, jet fuel, motor oil, heating oil, etc. A barrel of crude oil contains 42 gallons of oil, and as of July 3, 2008 costs $145.29 per barrel. That means the raw material that the oil companies purchase currently costs roughly $3.46 per gallon.
Based on figures from its 2007 annual report, Exxon made approximately 58 cents per gallon for finding / buying oil, pumping it out of the ground and into storage tanks, transporting it to a refinery, turning it into gasoline, and distributing that fuel to gas stations all over the US. Of that 58 cents of profit, Exxon paid about 25 cents in income tax (they pay 41% of their taxable income to the US Government!) - (http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion). The Federal Government also collects 18.4 cents of excise tax per gallon. The state of Michigan charges an additional 19.875 cents per gallon of excise and environmental taxes, along with 24 cents of sales tax (at $4.00 / gallon). Including the sales and excise tax, Indiana residents pay 50.1 cents per gallon on gasoline, and 69.2 cents per gallon on diesel.
So while ExxonMobil makes 33 cents per gallon of gross profit (without the inclusion of paying their employees and the other costs of being in business), the Federal Gov. & State Governments takes 87 cents per gallon of gas sold in MI, 75 cents per gallon of gas sold in IN, and a national average of 62 cents per gallon of gas sold in the US (http://www.indianagasprices.com/tax_info.aspx).
I have heard many people complain that the high fuel prices are the fault of the "greedy" oil companies, or President Bush, etc. But nobody ever looks at the issues that really affect the price of fuel. The falling value of the dollar. Looking at the year 2000, the Euro was worth 82 cents compared with the US dollar, and crude oil was at approximately $30 per barrel, or 36.5 Euros. In 2008, because our elected officials in Congress, the Senate, and local Governments (the President has little control) have degraded the value of the dollar by decades of out of control deficit spending and enacting various future programs that have no fiscal support, the Euro has now appreciated from 82 cents to approximately $1.60. In comparison, while the cost of crude oil has quadrupled in dollars (from $30 to $145), it has barely doubled in Euros (from 36.5 to 80). If the US dollar had maintained parity with the Euro, crude oil today would cost $80 a barrel and gas would be under $3.00 per gallon.
The problem is not the oil companies - they give away almost half of their profits in taxes, and what they do earn they deserve. Companies like Exxon are American companies that are largely owned by American stockholders, who employ ten of thousands of white and blue collar Americans and pay them very high wages. They help to maintain the high standard of living the US enjoys, as well as the technical and technological superiority that the US enjoys over the rest of the world.
The problem isn't OPEC or the oil producing companies of the Middle East. Why would they want to produce more oil? They are in business to make money, and they have a product that everyone wants and needs. The price of oil is up, which means the profits they fairly earn are up. Do farmers who grow corn sell their product for $3.00 a bushel when the market pays $4.00, and is up from $2.00 per bushel last year? Do movie stars cut their $20M per picture salary to make theater tickets more affordable? Sports figures give back half of their multiple million dollar paychecks to make sports tickets cheaper? So why should oil producers flood the market, lowering prices and cutting into their profits?
My point in all this? Don't complain ... Vote. This is an election year. Get interested in US politics and educate yourself on how we are affected by the laws that our elected officials have been enacting for decades. Vote for the officials who will reduce spending, balance the US budget, and do what is necessary to keep our country and our dollar strong. Take a look at how much our IN Governor Mitch Daniels has done for our state in the past couple of years - balanced our state budget, reduced spending, lowered property taxes. It does affect you, and you can make a difference. Change can occur!
Ken Rentiers wrote:
On Aug 8, 2008, at 9:20 PM, Stephen Sherman wrote:
ARE US oil companies drilling on the leases they have in the Gulf or land, NO!
The oil companies lease tracts by bidding. They pay FedGovCo an initial deposit and an annual rental for the term of the lease. If the tract is not developed the lease is lost. You can bet the very first thing that happens after the money has been spent is exploratory drilling. And, more often than not, what appeared to be a promising tract turns out dry. So they don't continue drilling. This happens the majority of the time. Finding oil is ex-pen-sive. There's your "windfall profits" right there. Jesus Christ, Stephen, do a little research before spouting off, you sound like a goddamned fool.
Have they built any new refineries in the past 25 years, NO!
Can't get the permits. Every time they try to put up a new refinery, or tap into the vast proven fields off CA or FL they get sued by the Cariboosters and the Firend of the Polar Bear. See "research" above.
Why is EXXON MOBIL getting out of the service station bussiness TOO LITTLE PROFIT!
And the corner lots are worth a fucking fortune! They have shareholders to answer to. ROI. That's how this country grew.
I quit - you can't fix stupid. _________________________________________________________________ To unsubscribe or modify your subscription options, please visit: http://lists.ferrarilist.com/mailman/options/ferrari/brianbuxton%40buxtonmotorsports.com
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-- Brian E. Buxton
President, Buxton Motorsports, Inc . www.BuxtonMotorsports.com (812) 476-2281 x 209 Member ThaList.com
President, Brian Buxton Enterprises, Inc.
Nationwide Enclosed Auto Transportation
www.BuxtonMotorsports.com/storage-transportation.php
Founder & Past President SO. IN Region PCA www.pca.org/soi
- Re: Illinois speed traps, (continued)
- Re: Illinois speed traps Stephen Sherman, August 8 2008
- Re: Illinois speed traps Paul Bennett, August 8 2008
- Re: Illinois speed traps Stephen Sherman, August 8 2008
- Re: Illinois speed traps Ken Rentiers, August 8 2008
- OIL Brian E. Buxton, August 9 2008
- Re: OIL Rick Lindsay, August 9 2008
- Re: OIL Ken Rentiers, August 9 2008
- Re: OIL LarryT, August 9 2008
- Re: OIL Rick Lindsay, August 9 2008
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