Americas Irrational Petroleum Dependence

For the amount of electricity it takes to refine oil, we could leave the crude in the ground.

By Doug Korthof, published by EV World

Open Access Article Originally Published: June 19, 2009

It takes 8% to 12% of the energy in a barrel of oil to refine it into gasoline.

Oil extraction and refining is the largest industrial user of electric and natural gas in (about 12% of the national market for cars, gas and the car culture, more than our share by population). There are other costs: for example, 20 gallons of federally-subsidized potable water, the amortized cost of exploration, transport, distribution, cleanup, etc.

The electricity used to refine oil alone would power cars further than what's in the rest of the barrel

Now, a simple calculation shows that, of the approximately 1470 kWh of potential energy in a 42-gallon barrel of oil, it takes about 140 kWh of electric and natural gas to refine the oil into appx. 44 gallons of "refined products", diesel, gasoline, heavy oil, etc.

With simple "ceteris parabus" (all things being equal) assumptions, the 140 kWh of energy used to refine that barrel would propel an average EV (or CNG car) at least 640 miles and as much as 840 miles, depending on the type of all-electric car. The EV1 would go 6 miles on one kWh; the RAV4-EV small SUV might go as little as 3 miles on one kWh, so the average would be somewhere in between.

The rest of the barrel, if all converted to gasoline or its equivalent, would yield about 1300 kWh of energy in the burnable fuel (remember, we're subtracting the energy to process the barrel of oil), or about 38 gallons of gas, enough to take the average Internal Combustion ("IC") car about 760 miles (at our fleet average of 20 mpg).

So, as a nation, we use 140 kWh of electric to produce 1300 kWh of IC fuel to go 760 miles, even if some cars use more and others use less. Thus, you can see that the modest use of hybrids that can't plug-in is not going to change this dynamic in the slightest. All it does is allow the hybrid drivers to relieve some guilt and feel better about themselves; as a people, we contribute to this charade.

Using low-cost electric and "free" natural gas to refine the barrel of oil is really just an energy transferrence, a way of storing energy in the form that we, as a society, think it should be used best -- as high-energy fuel for IC cars.

This pattern, of profligate energy usage (not to say waste) to produce the kind of fuel that produces the most money, is repeated again and again.

Logically, it's quite mad to expend the barrel of oil when the energy used to process it, using the barrel of oil at all, would accomplish the same goal, i.e., to power individual auto transport for the average use (i.e., individual automobile cars).

So we, as a people, could get the 700 miles of transport without any further expenditure of energy, and still keep the barrel of oil, thus avoiding its expense, the oil wars needed to obtain and defend it, the air, ground and water pollution and the health problems it causes.

But we see this madcap activity time and again.

In the case of the vast Athabascan shale-oil deposits, for example, the most cost-effective method of producing oil is to use "free" natural gas (free to the oil companies, that is) to heat the shale in-situ, then to pump out the resulting very-heavy and low-grade crude oil product, millions of barrels per day, which is then shipped to refineries for further processing. Obviously, the natural gas alone used for (or "wasted on") this project would carry CNG cars far more miles than the resulting gasoline carries IC cars.

Not to mention how far the wasted electric would carry EVs.

Now, it's true that the price of electric power is tied to the price of natural gas, because much of our electric is produced in high-quality natural gas "combined cycle" power plants. Similarly, the price of coal may be related to the cost of electricity, since much of our electric CAN be generated in antiquated coal power plants in the red states and the East Coast.

It's a popular that the price of oil is tied to the price of other energy, such as electric or natural gas.

The only causal relationship is that electric and natural gas is used to make oil and petroleum products; thus, if electric and natural gas rose, the price of oil would have upward pressure (if the price of oil had any relationship to the cost of production, which it does not).

As a rule of thumb, the price in dollars per 1000 cu. ft. of natural gas (at STP), which is about the same as 1 million BTU, is about the exact same cost, in cents, of one kWh of electric generated in a modern power plant.

Here's the latest numbers, showing that while oil is still rising, due to the price set by the oil companies' monopoly, the price of natural gas is falling, if anything; basically, it has languished in a range since the 1970's, even without counting inflation.

So what does it all prove? The obvious is that, as a nation, we don't use the most  means to run cars, we use the method that results in the most profit - and the most  profit stream -- that benefits the Standard Oil Trust "Seven Sisters" oil companies and evidently bribed officials in Congress. And in the administration.

Note that generation of electricity via natural gas now costs less then 4 cents per kWh, which is expended to produce much more profitable, but less efficient and more socially objectionable, fuel for IC cars.

This analysis, then, sort of pulls the mask off the claim that the oil market is a free market, or that our energy policy is rational.

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