Dave's Energy

Friday, April 28, 2006

Comparisons through Charts

I've generated some graphs to illustrate some lesser-illustrated facts about gasoline prices and Oil and Gas companies.

Bureau of Labor Statistics

Yet there is no public outcry against breakfast cereal, no added taxes for successfully selling Cheerios.

Here's another one, showing profit margins across industries (click to enlarge):

This one is from Western States Petroleum Associaton; data from Businessweek and 10-Ks. Sure, the larger O&G companies earn billions of dollars per quarter, but they also suffer billions of dollars in costs, making their margins slim and in line with the average, as this graph depicts. Tech companies, on the other hand, dominate the upper portion of profit margins, yet are applauded (if not encouraged) to do so by the public. Is there a double standard?

A good ethanol article by Ed Wallace

Ed Wallace has written a very good article in Business Week (Ethanol: A Tragedy in 3 Parts) relating some of the history of mistakes made in the U.S. as we've tried to make ethanol a larger part of our fuel mix. He points out the VOC and smog problems, which are well documented and known to anyone paying attention, but I think the most interesting reminder in the article is the unique position Brazil has been in with regard to sugar crops...a position that we can't hope to replicate given our farming climate in the U.S.

We might be able to improve yields from corn (new enzymes, bio-engineering, etc.), but more likely we have to focus on ways to increase yields from crops which have better starting qualities relative to corn. But so many questions follow from that issue...

If a fuel future based on ethanol doesn't include corn, will the politicians be as interested in pushing ethanol?

If we determine that ethanol can be made competitive based on imported crops other than corn, are we still willing to back it? Would that make us less dependent on foreign oil producers but more dependent on foreign crop producers?

Would we all want to invest in warm-climate farm countries that can grow lots of sugar?

Would Hawaii become the country's most important fuel supplier?

Would the sugar producers of the world form a cartel (SOPEC)?