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August 19, 2005

Perspective

There are 42 U.S. gallons in a barrel of crude oil which comes to 336 pints. That makes a pint of oil today worth roughly $.19.

I paid $2.59 yesterday per gallon of gas yesterday or $.32/pint of which 25% was various taxes. Not bad really considering what my car could run on.

milk             = $    .47/pint[1]
Coca-Cola        = $    .87/pint[2]
Campbell's bean
w/bacon soup     = $   1.65/pint[3]
Newcastle 
brown ale        = $   2.25/pint[4]
Roberts sweet
cream butter     = $   2.79/pint[5]
USDA Prime bone-
less ribeye steak= $  10.96/pint[6]
human blood      = $ 90-259.00/pint[7]

Lincolnite Mr. Wilson pointed out this cartoon at Reason which kind of gets at my point but it's also clearly a jab at proponents of alternate fuels.

The real point is, the oil industry still thinks we're getting a bargain as they report record profits. This interview with Matthew Simmons, the head of a Houston investment bank specializing in energy markets, is interesting for a couple of reasons. First, he pushes the point that even at $120/barrel oil will still be ridiculously cheap and like many other peak oil alarmists, he thinks $5-10/gallon of oil is a fair price. Second, and more importantly, he talks about ways we will be able to deal with gas prices through the roof.

It will become cheaper for manufacturers to go back to how things used to be done. All those empty factories here will be cheaper to operate, even at higher wage levels, because of the cost of transportation. Just-in-time manufacturing will become a thing of the past. Use rail and rivers for transportation of goods, and finally, help India and China avoid the developmental pitfalls we created during our economic expansion.

Gas is so cheap at $.32/pint. Enjoy it while you can.


[1]. Based on the last half-gallon price I observed at the local grocery.

[2]. Based on the last observed price of a 20 oz. bottle.

[3]. Grocery store price. Convenience store price is likely higher.

[4]. This assumes you fill your beer-powered car on Friday nights at Duffy's tavern.

[5]. Last price I paid although it fluctuates wildly depending on supply.

[6]. Last I checked. I haven't actually been able to afford one for a long time.

[7]. It's difficult to pin this down to a reasonable range because the public (and by public I mean Internets) sources for this information are scarce, outdated and mostly anecdotal.

Posted by Half-Cocked at August 19, 2005 05:01 PM

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