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A buddy works on offshore rigs around the world, and it got me thinking. I wonder, for every one gallon of gasoline I pump into my vehicle, how many were used
by grecy 3y ago
A buddy works on offshore rigs around the world, and it got me thinking.
I wonder, for every one gallon of gasoline I pump into my vehicle, how many were used to extract, refine, transport, store and pump it. I'm assuming it's at least 10 to 1. Maybe even 100 to 1
I bring this up because the company will fly him from anywhere in the world to where they want him to work, chopper him out to the rig, etc. etc. All of that gas consumed to get ONE worker onto the rig.
- ars 3y agoIt's easy enough to calculate: Check the cost of producing the fuel, and then calculate how much fuel you can buy (in bulk) for that much money. It won't be exact, but it'll be pretty close. And the number is higher than you might expect!
- barelyauser 3y agoA car will make 10 MPG and tow thousands of pounds. You can tow two pounds thousand of miles. And consider most of the route is made by very efficient boat, pipeline. It will not get even close to 1 to 10. Closer to 1 to 1.
- fleetwood 3y agoIt seems unlikely the ratio of (oil consumed by production):(oil production) is greater than 1:1. If it was greater than 1:1 - e.g. 10:1 - wouldn't the production company simply sell the 10 barrels instead of using the 10 barrels to produce and sell 1?
- inertiatic 3y agoNot really. You need to drill to make any oil. So if you drilled and spent 10 parts to make it happen (flying people there, energy to drill etc.) and extracted 11 parts, you're selling 1 of those and then using the next 10 to mine the next 11 to get another 1 to sell. It would still make sense economically as long as you were turning a profit overall (so factoring the total cost into what you're actually selling), although it would be a huge waste in absolute terms. I do doubt that would be a realistic estimate though.
- fleetwood 3y agoI see what you mean. That's more interesting than I originally thought. If a company has a hypothetical 10 barrels of oil on hand, and is given two choices: (1) do no work and sell the 10 barrels; (2) do work, use the 10 barrels, and have 11 barrels left over to sell or use again Why would the company choose option 2? Option 1 is both easier and results in 10x the immediate value. I suppose over enough cycles (i.e. >10x), the "1 additional barrel per cycle" will add to more net barrels sold to market. But with any meaningful discount rate, the time value of money would almost certainly be greater for option 1. Maybe fracking was a ZIRP phenomenon.
- kortilla 3y ago2 is way way better of an option. You’ve just described a process that grows your resources by 10% each iteration. Unless it was very expensive or high risk, it’s a no brainer.
- pests 3y agoAren't you guys just describing how business works? You have 10 dollars. You can keep the 10 dollars and then have 10 dollars. Or you can invest that 10 and earn 11. Or, in a real situation: Walmart had 12B in revenue with 2% profit margin for 2023. It sounds like they started with 11.9B in money, bought inventory and paid their expenses, and after selling everything wound up with 12B. How is this different to spending oil to make oil?
- brewdad 3y agoWith option 1 you end up in the old meme of 1. Sell 10 barrels 2. ????? 3. Profit After you’ve sold the ten barrels, now what? There are no more barrels and no more coming since you chose not to drill. You have to shut down and do something else with whatever money you made from the sale.
- throw0101a 3y ago> I wonder, for every one gallon of gasoline I pump into my vehicle, how many were used to extract, refine, transport, store and pump it. Well, almost 40% of all ship cargoes are fossil fuels (oil, coal, methane gas): * https://thelastdriverlicenseholder.com/2022/01/12/almost-40-of-all-ship-cargoes-are-oil-coal-and-gas https://thelastdriverlicenseholder.com/2022/01/12/almost-40-...
- akiselev 3y agoThat's called the "energy return on investment" [1] and it's a critical factor in how profitable a fossil fuel source is. An easily acccessed oil field can easily have an EROI of 20-50, so they spend a gallon worth of energy to extract 20-50 gallons. Shale oil has a EROI as low as 1-1.5 and it's sometimes only worth it when burning the accompanying natural gas for free energy. [1] https://en.wikipedia.org/wiki/Energy_return_on_investment https://en.wikipedia.org/wiki/Energy_return_on_investment
- ZeroGravitas 3y agoEroei analysis usually doesn't go very far down the production process. What you want is Well to Tank calculations, which suggest that the process of making gasoline accounts for 15-20% of the total GHG emissions, so add 25% onto the number you get from burning the fuel in your car.
- userbinator 3y agoOil companies need to make a profit. If it cost more to produce than to sell, they wouldn't do it.
- bluGill 3y agoSome of the energy they use comes from electric.
- brewdad 3y agoThere are huge barriers to entry. A marginal barrel of oil might “cost” $1 coming out of the ground. If you use 50 barrels refining it and getting it to market, you can still make a profit if that barrel costs the end user $51.
- kortilla 3y agoYour analysis is way off and it shouldn’t have even passed the sniff test when you thought it was more gallons consumed than to get you a gallon. Remember, the helicopter that flies your friend out there just buys jet fuel at a regular airport. With an entire supply line that has to buy the fuel off of the open market, it’s not possible for it to require a gallon of gas to produce a gallon of gas, let alone 10 or 100. It’s no different than guessing that the process to make 1 potato takes 100 potatoes. It has to be more extracted than consumed to even have the possibility of a business.