AV gas prices

Peter Dohm wrote:
"Blueskies" wrote in message
...

"Steve Hix" wrote in message
...

For starters, look at what companies like that will have to spend in R&D,
developing new field and processes, etc etc etc.

They're not just taking the profits and locking them up in the bank.


Profits are stated after all the costs, like R&D, new field developement,
etc etc are rolled in...

Not necessarily. I am not an accountant, but AFAIK you are not
automatically allowed to expense and/or depreciate everything that would
make good business sense in the year that you might expect...

Most capital expenditures must be paid for up front and depreciated
over their life. A portion of the profits will be paid out in
dividends and a large portion put back into development of new
reserves. The biggest problem from the standpoint of the oil
companies is that each new find will cost substantially more to
develop that the current fields. The high prices are helping to make
some finds that were abandoned as unprofitable look just a little
better for development. They won't be developed though unless the oil
companies feel that there will be some stability in the market.

BobR wrote:

Peter Dohm wrote:

"Blueskies" wrote in message
.. .

"Steve Hix" wrote in message
...

For starters, look at what companies like that will have to spend in R&D,
developing new field and processes, etc etc etc.

They're not just taking the profits and locking them up in the bank.


Profits are stated after all the costs, like R&D, new field developement,
etc etc are rolled in...

Not necessarily. I am not an accountant, but AFAIK you are not
automatically allowed to expense and/or depreciate everything that would
make good business sense in the year that you might expect...


Most capital expenditures must be paid for up front and depreciated
over their life. A portion of the profits will be paid out in
dividends and a large portion put back into development of new
reserves. The biggest problem from the standpoint of the oil
companies is that each new find will cost substantially more to
develop that the current fields. The high prices are helping to make
some finds that were abandoned as unprofitable look just a little
better for development. They won't be developed though unless the oil
companies feel that there will be some stability in the market.



Everybody seems to be overlooking the tax breaks and subsidies.
Without which, gas would cost us somewhere between $10 and $12 a gallon!


FWIW

Richard

cavelamb himself wrote:
BobR wrote:

Peter Dohm wrote:

"Blueskies" wrote in message
.. .

"Steve Hix" wrote in message
...

For starters, look at what companies like that will have to spend in R&D,
developing new field and processes, etc etc etc.

They're not just taking the profits and locking them up in the bank.


Profits are stated after all the costs, like R&D, new field developement,
etc etc are rolled in...

Not necessarily. I am not an accountant, but AFAIK you are not
automatically allowed to expense and/or depreciate everything that would
make good business sense in the year that you might expect...


Most capital expenditures must be paid for up front and depreciated
over their life. A portion of the profits will be paid out in
dividends and a large portion put back into development of new
reserves. The biggest problem from the standpoint of the oil
companies is that each new find will cost substantially more to
develop that the current fields. The high prices are helping to make
some finds that were abandoned as unprofitable look just a little
better for development. They won't be developed though unless the oil
companies feel that there will be some stability in the market.



Everybody seems to be overlooking the tax breaks and subsidies.
Without which, gas would cost us somewhere between $10 and $12 a gallon!


FWIW

Richard

Just imagine what a gallon of gas would cost if the oil companies had
not found so many uses for hydrocarbons beyond burning them up as
fuel. If the only product derived from a $100 barrel of oil was
gasoline a gallon of gas would cost $5 just based on the crude price
alone. A 42 gallon barrel of the best grade of crude, which is the
basis for reporting oil prices, will yield less than 20 gallons of
gasoline. When you add in transportation, refining, more
transportation, distribution and a minimum profit for each step along
the way, the prices are surprisingly low.

"BobR" wrote in message
...


cavelamb himself wrote:
BobR wrote:

Peter Dohm wrote:

"Blueskies" wrote in message
.. .

"Steve Hix" wrote in message
...

For starters, look at what companies like that will have to spend in
R&D,
developing new field and processes, etc etc etc.

They're not just taking the profits and locking them up in the bank.


Profits are stated after all the costs, like R&D, new field
developement,
etc etc are rolled in...

Not necessarily. I am not an accountant, but AFAIK you are not
automatically allowed to expense and/or depreciate everything that
would
make good business sense in the year that you might expect...


Most capital expenditures must be paid for up front and depreciated
over their life. A portion of the profits will be paid out in
dividends and a large portion put back into development of new
reserves. The biggest problem from the standpoint of the oil
companies is that each new find will cost substantially more to
develop that the current fields. The high prices are helping to make
some finds that were abandoned as unprofitable look just a little
better for development. They won't be developed though unless the oil
companies feel that there will be some stability in the market.



Everybody seems to be overlooking the tax breaks and subsidies.
Without which, gas would cost us somewhere between $10 and $12 a gallon!


FWIW

Richard

Just imagine what a gallon of gas would cost if the oil companies had
not found so many uses for hydrocarbons beyond burning them up as
fuel. If the only product derived from a $100 barrel of oil was
gasoline a gallon of gas would cost $5 just based on the crude price
alone. A 42 gallon barrel of the best grade of crude, which is the
basis for reporting oil prices, will yield less than 20 gallons of
gasoline. When you add in transportation, refining, more
transportation, distribution and a minimum profit for each step along
the way, the prices are surprisingly low.

While I tend to agree with you, there is another issue that seems to have
escaped any commentary--what is the price of domestic crude oil and where
does the money actually go?

Domestic crude oil comes from several US states including Texas, California,
Oklahoma, Loiusiana, and Mississippi. All of those states have considerable
power to tax what is produced there, just as much of the cost of imported
oil is tax money paid to the governments where it is obtained. So, how much
are we currently paying in state and local taxes on the crude oil--which is
in addition to the taxes on finished products of which we are already well
aware?

This same question might be of considerable interest in some other places
where crude oil is produced; such as Norway and the UK.

Peter

On Wed, 30 Apr 2008 08:26:24 -0700 (PDT), BobR
wrote:

All the complainers have to do is just do the math. At todays price of
$120 a barrel, divided by 42 gallons = 2.86 a gallon. In my area,
regular is selling for 3:50 a gallon. That leaves 64 cents a gallon to
refine it, transport it, leave some profit for the oil company and gas
station, and includes the taxes. It's the price of crude that's
killing us, not the oil companies. The price of crude oil per barrel
is what needs to come down for any relief at the gas station. I think
the figure of 20 gallons of gasoline from 42 gallons of crude is way
off. With modern refineries, they get just as much gasoline from just
as many gallons of crude. Do some reseach on that, and you'll find
your 20 gallon figure came from some drunk talk in a bar one night.


Just imagine what a gallon of gas would cost if the oil companies had
not found so many uses for hydrocarbons beyond burning them up as
fuel. If the only product derived from a $100 barrel of oil was
gasoline a gallon of gas would cost $5 just based on the crude price
alone. A 42 gallon barrel of the best grade of crude, which is the
basis for reporting oil prices, will yield less than 20 gallons of
gasoline. When you add in transportation, refining, more
transportation, distribution and a minimum profit for each step along
the way, the prices are surprisingly low.

Sliker wrote:
On Wed, 30 Apr 2008 08:26:24 -0700 (PDT), BobR
wrote:

All the complainers have to do is just do the math. At todays price of
$120 a barrel, divided by 42 gallons = 2.86 a gallon. In my area,
regular is selling for 3:50 a gallon. That leaves 64 cents a gallon to
refine it, transport it, leave some profit for the oil company and gas
station, and includes the taxes. It's the price of crude that's
killing us, not the oil companies.

Really? Have you noticed the profits of many of the large oil companies
of late?

Matt

In article ,
Matt Whiting wrote:

Sliker wrote:
On Wed, 30 Apr 2008 08:26:24 -0700 (PDT), BobR
wrote:

All the complainers have to do is just do the math. At todays price of
$120 a barrel, divided by 42 gallons = 2.86 a gallon. In my area,
regular is selling for 3:50 a gallon. That leaves 64 cents a gallon to
refine it, transport it, leave some profit for the oil company and gas
station, and includes the taxes. It's the price of crude that's
killing us, not the oil companies.

Really? Have you noticed the profits of many of the large oil companies
of late?

The large absolute values of major energy companies' profits results
from the much larger values of their costs of doing business.

Try looking at the profits as a percentage of total operational costs.

They're down around 10% or so, which is pretty typical for healthy
companies in other fields.

Steve Hix wrote:
In article ,
Matt Whiting wrote:

Sliker wrote:
On Wed, 30 Apr 2008 08:26:24 -0700 (PDT), BobR
wrote:

All the complainers have to do is just do the math. At todays price of
$120 a barrel, divided by 42 gallons = 2.86 a gallon. In my area,
regular is selling for 3:50 a gallon. That leaves 64 cents a gallon to
refine it, transport it, leave some profit for the oil company and gas
station, and includes the taxes. It's the price of crude that's
killing us, not the oil companies.
Really? Have you noticed the profits of many of the large oil companies
of late?

The large absolute values of major energy companies' profits results
from the much larger values of their costs of doing business.

Try looking at the profits as a percentage of total operational costs.

They're down around 10% or so, which is pretty typical for healthy
companies in other fields.

And a lot lower than many other companies.

The U.S. pays a lot less for gasoline than may other countries. I
think it's over $18.00 (U.S.) per gallon in Aruba.

Dan, U.S. Air Force, retired