I was also planning on noting that what really matters is "person-miles-to-the-gallon," my way of encouraging folks who have larger vehicles to take heart in the ability to carry more than one person at a time.
Thinking in PMPG, for example, means my schweet eco-ficient motorbike gets on average 55 PMPG. A Chevy Suburban with one passenger? Only 13 PMPG. But wait! Before we get all self-righteous, let's add someone. With two passengers, you're at 26. That's subcompact efficiency. With three, you're at 39. That's hybrid efficiency. Max it out at eight, and you're rocking it at 104 PMPG. Of course, the Prius with four gets 220 PMPG, but still. Sharing is efficient. Those moms with their kid-transport-pools are doing their part, eh? And carpooling with four in an Escalade is just as efficient as one in a Prius.
But as I got into thinking about gas prices, and looking at historical trends, I encountered something of a fuddler. Back in 2008, as we all remember, gas prices soared to record highs, hitting 140 dollars for a barrel of light sweet crude and spiking at around $4.12 for refined go-juice at the pump. At the end of last week, gas prices are at about $3.88 a gallon at the pump on average nationally, and just about $102 dollars a barrel on the market.
Take a look at these charts, side by side:
They're similar, but not identical. A barrel on the market is 42 US Gallons. In 2008 during the price-spike, $140 a barrel meant a market price of $3.33 per unrefined gallon, which means the differential between market and pump price was $0.79 per gallon. In 2012, $102 a barrel translates into a price of around $2.42 per gallon of light sweet crude, which means the differential between crude market and refined pump price is $1.46 per gallon.
This is a very different margin.
Key cost factors for a gallon of gas are production, taxes, distribution and marketing, and station markup. It's not taxes at the pump. It's not less refining capacity, because refining capacity has not decreased. It's not higher costs for drilling, because that would be reflected in the market cost of the crude. It's not increased real-estate values over 2008 for gas station owners and franchisees. It can't be distribution costs for transportation, because that would have been mirrored in the 2008 price surge. Station markup remains low. That's just not where your average service station franchisee or independent small business owner makes their money.
On some rather basic level, meaning that of addition and subtraction, this doesn't seem to work. Somewhere in the system, transaction costs have gone substantially up. Not so much that the graphs aren't similar. But there's variance there. It seems significant. At 9 million barrels a day consumption in the US, that's around a $200,000,000 dollar drain from the economy. Every single day. Even by Washington standards, that's real money.
Huh. Odd thing. Anyone out there more informed than I about this?
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