from the editor's desk : energy efficiency

What goes into the cost of a gallon of gas?

Lee_Teschler — Fri, 30 May 2008 20:44:00 GMT

I happened to come upon this piece of information from D.R. Barton, a financial columnist, on the cost components of gasoline. It makes interesting reading.

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What is the breakdown in the cost of a gallon of gasoline? Based on several sources, here are the best ranges I could find:

• Tax per gallon (U.S. Only): 18.4 cent Federal excise tax, plus, an average of 27 cents of state taxes (including sales and environmental taxes).

• Refining costs: ranging in estimates from 8% up to 22%.

• Transportation, storage & marketing: about 4.5% to 8%.

• Cost of crude oil: at $3.80 per gallon – 72% or $2.74.

These numbers come from a combination of resources including the U.S. Department of Energy, the U.S. Energy Information Administration, and articles from the Washington Post, Wall Street Journal and CNN.com.

I provided these numbers because the number one question I’ve been asked by folks when discussing the article is, “What goes into the price of a gallon of gas?”

Interestingly, in 2006, with gas at an average of $2.43 per gallon, taxes made up almost 19% of the cost; now it’s down to “only” 12%. Clearly the price of crude oil is dominating the cost right now, but that’s not always the case. As we found out when Katrina shut down key refining plants on the Gulf coast, refining, distribution and storage costs can fluctuate based on supply and demand.

But despite high historic prices in the U.S, prices here remain relatively low compared to other countries around the world. Many oil producing countries subsidize gas prices, so countries like Venezuela, Nigeria, and most states in the Middle East have prices well below the cost of production (to stimulate economic growth and gain political favor). On the other end of the scale, most European countries have heavy gas taxes; the average price for a gallon of petrol in the UK is now $8.56 and in many Scandinavian countries, it’s north of $9.00 per gallon.

Want water-efficient energy? Forget biofuels and ethanol

Lee_Teschler — Thu, 17 Apr 2008 19:27:00 GMT

Virginia Tech researchers claim the creation of ethanol and biofuels consume the most water of any source of energy. The most water-efficient energy sources are natural gas and synthetic fuels from coal gasification.

http://www.newswise.com/articles/view/539917/?sc=swtr

headline: Internet, communications technologies boost energy efficiency

Lee_Teschler — Tue, 26 Feb 2008 20:09:00 GMT

According to a study by the American Council for an Energy Efficient Economy (ACEEE), it takes the U.S. less than half the energy to produce a dollar of economic output now that it did in 1970.

Also ccording ACEEE, every extra kilowatt-hour demanded by Internet and communications technologies produces a ten-fold energy savings in the U.S. economy.

So now when you are surfing American Idol fan sites, you can be secure in the knowledge that you are actually saving energy!

The report states, "Since 1970... U.S. energy consumption per dollar of economic output has declined from 18,000 British Thermal Units (Btus) to about 9,000 Btus in 2008. Through that energy efficiency we have met approximately 75 percent of our new demand for energy."

Energy intensity (Units of Energy used to produce a unit of Gross Domestic Product) declined 1.8 percent per year between 1970 and 1995. As new internet and communications technologies forged onto the scene between 1996 and 2006, energy intensity declined at a much more rapid rate of 2.4 percent.