GAS PRICES GOT YOU DOWN?            submitted by Frank Moro  [Perhaps this will help members by showing the cost breakdown on fuel—Frank] Who gets rich off $3 gas—who doesn’t.  The guy running the service station makes just a few cents, while crude oil producers take the biggest chunk. Motorist may fume when forking over $3/gal at the local service station, but it turns out, your local filing spot makes chump change from a gallon of gas.  So, exactly who is getting rich? OIL TRADERS:  Often blamed for pushing up prices, trades don’t necessarily benefit from the high price of crude or gasoline.  They profit from how much the price changes.  Traders can get rich—as long as they bet correctly on whether prices will rise or fall. An investment bank makes money when oil prices go from $95 to $100/bl if it bet the price will rise—or $100 to $95 if it bet the price will fall—not on the difference between production cost and trading price.  “If you wanna keep your job, you gotta be more right than wrong,” said Jon Kilduff, an energy analyst at the trading firm MF Global in New York, explaining how traders make their money. GAS STATIONS:  A surprisingly small amount goes to the guy who runs the station.  Most service stations are independently owned and operated and take in between 7 and 10 cents for every gallon they sell, according to the Energy Information Administration.

That 7 to 10 cents going to the gas station isn’t profit.  Out of that, station owners still have to pay leases, workers, and other expenses—leaving them with a profit of just a few cents.  For the service stations, most profit comes from selling coffee, cigarettes, food and other amenities.  These calculations are based off of EIA’s most recent numbers, when gas was $3.04 a gallon. TAXES:  The government takes about 40 cents right off the top, with about 18 cents going to the feds.  State taxes vary widely, but the national average is about 22 cents/gal.  Most of this money is used to build and maintain roads. TRANSPORTATION:  Getting the gas from refineries to service stations via trucks or pipelines—and the cost of storing it in large tanks—eats up another 23 to 26 cents/gal. REFINING:  About 24 cents/gal goes to refining companies like Valero, Sunoco, or Frontier that specialize in turning crude oil into gas.  Some companies like ExxonMobile, Chevron and ConocoPhillips produce and refine crude oil. CRUDE OIL:  This is the most expensive part of a gallon of gas.  $2.07 from every gallon of gas (at $3.04/gal) goes to producers of crude like Chevron, BP, and smaller outfits like Anadarko and Marathon, or national oil companies controlled by countries like Saudi Arabia, Mexico, or Venezuela.

Crude currently trades around $100/bl (3/13/08), but breaking down the money in that barrel of oil is tough.  Exploration and production costs, royalty payments—all a big part of $100/bl oil—vary widely country by country and project by project. “It’s difficult to generalize, there’s a whole spectrum of costs.” said Ron Planting, an economist with the American Petroleum Institute, an industry trade group.  They can range from $1/bl to produce crude in Saudi Arabia to over $70/bl to find, develop and pump oil in the deep water Gulf of Mexico or off the coast of Algeria, said Ann-Louise Hittle, an oil analyst with energy consultants Wood MacKenzie. EIA estimate it costs U.S. oil companies an average of about $24/bl to find, develop and produce oil worldwide, but that doesn’t include costs like transportation, administration, or income taxes—which can be substantial.  While Exxon made over $40 billion in 2007, a 60% increase from 2004, it paid over $100 billion in taxes and royalties. Nonetheless, $40 billion—or any of the record profits seen by most oil companies over the last few years—is certainly a lot of money, and it has put Big Oil in lawmaker’s cross hairs.  Rep. Edward Markey, D-Mass., had called the chief executives of the five biggest oil companies to testify on the industry’s record profits on April 1st.  Markey’s office swears it’s no April Fool’s joke.

FROM OUR MEMBERS’ KITCHENS                                             recipes from members  Miniature Meat Turnovers (From Judy Johnson’s Kitchen) 1 envelope  Lipton onion soup mix or onion-mushroom soup mix ½ pound  Ground beef 1 cup   Drained bean sprouts ½ cup  Sliced water chestnuts 2 packages Refrigerator crescent rolls Preheat oven to 375 degrees.  In a medium skillet combine the first four ingredients.  Brown well. Separate crescent dough as package directs, cut in half.  Place a spoonful of mixture in the center of each triangle, fold over and seal edges.  Place on an ungreased cookie sheet, bake 15 minutes or until golden brown.  These freeze well. Enjoy!

ABOUT MEMBERS CVR was shocked last month with the loss of Steve Kokoski.  Steve was a relatively new member to CVR, but his family has been involved with the club for many years.  He will be remembered for his wide smile, his gentle manner and friendship to all.  We send our sympathies to his wife, Christine, his children and his mother, Genevieve. Dotty Baronas’ daughter, Brenda, lost her husband, Ward Clemons, to a long battle with cancer.  Dotty has had her share of issues to deal with in the past year, but she remains very hopeful that things will soon begin to settle down.  On a more positive note, Dotty reports the christening of two great-granddaughters on April 20th.  She says that is her excuse for missing the CVR meet on that day. Bill Hick, Sr. finally took the plunge and gave in to the need for surgery to insert a pacemaker.  His color and energy was almost immediately restored.  There have been reports that he has actually started to walk the neighborhood — an activity he has not performed for quite a while.  Now, if Anne could only get him to do some yard work, . . . .  Our best wishes for a continued strong recovery “Willie”.

THANKS TO ALL CVR MEMBERS WHO PARTICIPATED  CLICK HERE to read letter from The Hole in the Wall Gang Camp

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