I have no answer to some basic questions pertinent to the growing discourse regarding the rising price of oil.
A few of us know
some of the answers, and some know
a few
of the answers. I had to look up the answers, or else I would have
been among the shoulder-shruggers.
For instance, how big is a barrel?
Answer: 42 gallons.
So now you know that when the price for a barrel of crude oil hits $140, that's the same as $3.33 a gallon.
What nation supplies the most crude oil and petroleum products to the
United States ?
Answer:
The United States. According to the Energy Information
Agency (
www.eia.doe.gov), our country supplied 41 percent of the oil we
consumed in March of this year.
What nation, other than the U.S., supplies the most crude oil and
petroleum products to our country?
Answer:
Canada. Our northern neighbor accounts for 12 percent of
our nation's oil and 20 percent of all the oil we import.
The rest of the top five include
Saudi Arabia (7 percent and 13
percent);
Venezuela (6 percent and 11 percent);
Nigeria
(6 percent and 10 percent); and
Mexico (5 percent and 8 percent).
How much oil do we import from Persian Gulf countries?
Persian Gulf countries accounted for
only 16 percent of our foreign oil
imports each year from 2005 to 2007. In fact, our Persian Gulf
imports
declined most of this decade, from a 15-year high of a
little more than 1 billion barrels in 2001 to 791.9 million barrels in 2007.
What's the difference between crude oil and petroleum products?
Answer: Crude oil provides, among other products,
gasoline, diesel and jet fuels,
heating oil, liquefied petroleum gas, lubricants, asphalt, plastics, synthetic
fibers, detergents, fertilizers, ink, crayons, bubble gum, deodorant, tires
and heart valves.
One barrel of crude oil (which is 42 gallons, remember?), yields about
19.6 gallons of gasoline. The other 22.4 gallons go into the products just mentioned.
How much of the cost of oil goes into the price of gasoline?
Answer: A
bunch. We consumed about 390 million gallons of gas a
day last year in our cars, trucks, recreational vehicles, boats, farm
implements, and construction and landscaping equipment. Back when
crude was $68 a barrel (that was just last year), it accounted for about
58 percent of the price of a gallon of gasoline. The rest of the price came
from refining costs (17 percent), federal and state taxes (15 percent),
and distribution and marketing (10 percent).
By the way, the price of crude accounts for about 77 percent of the cost of gas at $4 a gallon.
Here's a little something you may not have considered:
What products that you buy on a regular basis are sold with tax included?
Answer:
Gasoline. For everything else, you add the tax at checkout.
The
folks in California pay 63.9 cents a gallon in state and federal fuel
taxes, the most in the nation. That's just the base, though. Motorists
there also pay an additional
6-percent state sales tax, with some
paying another
1.25-percent county sales tax plus applicable local sales taxes.
Same in Illinois , where
Chicago motorists pay 12.75
cents per gallon on top of the 57.9 cents per gallon in state and federal
taxes. Some Illinois motorists also pay a 6.25-percent sales tax.
Politicians, pundits, and other TV talking heads don't like to provide these
answers, because facts get in the way of positions that pander to the
mob. We don't point fingers at Canada , because it's de rigueur to paint
the Saudis with the broad brush of blame. Folks float the idea of a
moratorium on state and federal gasoline taxes without explaining its
minimal impact on gas prices, or without mentioning the $3 sales tax
some motorists pay on top of a $50 fill up.
Policymakers don't explain that oil trades in the dollar, which is weak
vis-C -vis the Euro, because that would require solutions for strengthening
the greenback.
And, it's easier for simple minds to convince simpler minds to impose
windfall-profit taxes on pension funds and owners of Individual
Retirement Accounts who invest in oil companies than to take on credit
card issuers charging double- and triple-digit interest rates to the millions
of people using plastic to pay for food and fuel.
Talk about irony.
And, we sure wouldn't want to impose a windfall-profit tax on someone
who goes from making $56,000 a year, as in, say, a Illinois legislator, to
$165,000 a year as a, lets' say, a Illinois U.S. Senator - an increase of nearly 200
percent (not counting book deals or real-estate related loans).
