Some interesting oil industry statistics:
Questions and Answers

From the 1990s to the present, even OPEC has very little control over prices because there is very little (some say none) excess production capacity anywhere in the world, including Saudi Arabia. Supply cannot be affected, so the price depends on demand. In the long run (months), the price is entirely controlled by the people who consume oil - for the most part that means American drivers.

In the short run, on a daily basis, the price is set by buyers, including market speculators, whose gut reaction to geopolitical, weather, and other impacts on the global market result in their "bets" that supply and demand a month or so out will be such-and-such, and that therefore the price they are willing to pay is this-and-that. There are only three significant oil-trading exchanges in the world: the New York Mercantile Exchange, a similar one in London, and a new smaller one in Dubai. A comment on this topic by Ralph Nader • EIA graphic relating oil price to 74 geopolitical events since 1970

Oil traders are human, and their reasons for being willing to buy oil contracts at any particular price range from scientific to emotional to downright illogical. For example, as the price neared $100 but fluctuated, when prices were as low as $94 or $95, many traders bought at those prices, seeing them as bargains in the face of (likely) impending prices at or over $100. Such buying then drives the price up, almost like a self-fulfilling prophecy.

A: There are some glaring errors in the list which make me suspicious of all the information. For example, Amoco is an integral part of BP (and Phillips is not and never was). Sinclair was acquired by ARCO many years ago, and ARCO has since been acquired by BP, also many years ago; but since then, the Sinclair brand was spun off and is now an independent company based in Utah. Citgo is owned by a south american company, Venezuela I believe (not sure). Conoco and Phillips are merged. I would be very surprised if BP, even excluding its ownership of Arco and Amoco, did not acquire and import some middle eastern oil.

I don't know what the numbers represent - barrels per day, per year, or what, but the U.S. imports something like 12 million barrels per day, or 365 million barrels per month, or 4380 million barrels per year - none of which even remotely make sense with the total, 658 million, on the list below. This makes me suspect that the whole thing is a fabrication.

Because most retail marketers buy their gasoline from the big refineries, and because all the big refineries have significant imported oil (from all over) in their streams, it is very unlikely that you could go to any major national brand gas station and get gasoline that did not derive to some extent from oil originally found in Venezuela, Saudi Arabia, Nigeria, Canada, Mexico, etc etc etc.

Upon further research I found this EIA (DOE) page.

The numbers are rather different than your list (Shell Oil Co = 0; Chevron 111 million; but ExxonMobil right on at 130 million). Note that the total for 2004 is given as 3700 million barrels imported, less than my guess of 4380 above - that was based on an import rate of 60% which we reached late in 2004. Also, many of the small operators on the list probably sell their crude directly to refineries - so, again, any given batch of oil, from almost any retail brand name, will likely contain middle eastern oil, with a few exceptions such as the companies that are geographically restricted and do their own producing, refining AND marketing.

Regarding Diamond Shamrock, I believe it is indeed owned by Valero, which imports significant oil from the Persian Gulf area. Even if it did not, it is absolutely inconceivable to me that a major refining company like Valero could possibly operate all the facilities it owns without imported crude including the Middle East. They also own a bunch of former Total refineries and stations - Total is/was a French company, undoubtedly an importer of middle eastern crude, and the arrangements are probably still in place. Bottom line, it is virtually impossible to buy gas at the pump that is "pure" non-OPEC, non-Middle East, non-Saudi, or non-anything. Almost all marketers buy from big refineries, and big refineries have NO CHOICE but to use as much crude, from whereever they can get it, to keep going at the 100% level. If you cut out Saudi crude from the refineries, then you cut out 14% of all gasoline.

Note that the EIA list is just Persian Gulf imports by company, not the entire middle east. Please be sure to read the introductory paragraph at the top of that page. And in case you are one who does not trust government data - all I can say is, I do, and the information in the EIA site is likely to be the most definitive you can get.

See also responses to questions below.

A: The basic data are here, but please also read this page. Even though some companies may not directly import Middle East oil, the fact is that most refineries create blends based on diverse purchases, so that it is unlikely in the extreme that you can go to any national brand retail gas station and expect to be purchasing gasoline that does not derive to some extent from Middle East crude oil. Exceptions might be those few companies, limited in geographic scope, that do their own exclusive producing, refining, and marketing. Even they likely blend other purchased crudes in their refinery streams. Oil is a global market. The only way Americans could eliminate Middle Eastern crude from their "diet" would be to reduce imports dramatically -- like by 30% to 50% -- and given our rate of consumption, that is not going to happen.

A: No. Since 1996, from 5% to 7% of Alaska North Slope (map, left, from USGS) oil was exported, about half of it to South Korea and the rest to China and Japan. Those exports ceased in 2000, and since then all Alaskan crude has gone to the US, mostly through Washington and California refineries. See the following sites for more information:
ANWR.org • NCSE • State of Alaska

A: Sorry to say this, but I think the idea of "energy independence" for the United States is a completely fictional concept, at least in terms of petroleum independence. We currently (2007) import around 63% of our requirements — and we do not do that because there is a bazillion barrels of oil hidden somewhere in the US just waiting to be produced. The US is probably the most thoroughly explored large nation on Earth, and all the ANWRs and other possibles out there are tiny drops in the bucket of our gas-guzzling habits. It MIGHT be possible to achieve a modicum of "independence" through rigorous conservation, but that cannot happen in any short time frame (like a few years). To do so, EVERY person in the US would have to reduce their consumption by 60%. Are you willing to refrain from heating your home on 4 out of 7 days per week, all year long? Or not drive at all on 4 out of 7 days per week, forever more? Or cease buying products whose manufacture, packaging, and distribution are gasoline-intensive — such as all imported foods, or vegetables from California in winter that are hauled further than a few hundred miles, or a thousand other things. It's simply not gonna happen.

We might BEGIN to approach the idea of working toward reducing our consumption by applying a big federal gasoline tax - like 50’ or $1.00 per gallon. But that's not gonna happen either - there would be so many bureaucratic "exceptions," "exemptions," special cases, that it would fall on its face. And no Congressman would do something so politically distasteful, even if the good of the country were at stake — as I personally believe it is.

A: See Above. Virtually all major refineries probably have some crude from OPEC countries in their streams. There are some small refining and marketing companies that just use local sources -- for example, here in Montana we have a company called Cenex that has a refinery in Billings which probably gets most of its oil from the Williston Basin (Montana, North Dakota, and Saskatchewan). There are undoubtedly other entities like that in other oil regions of the country; Sinclair, in Salt Lake City, makes that claim. But as far as any of the big names, Mobil, Texaco, Marathon, Unocal, Chevron, Amoco, BP, Exxon, Conoco, Shell, Total, Phillips66, and any others with national names (as well as a lot of other names that are not national, but that are owned by bigger companies -- for example, here in Montana we have a local marketing company called Town Pump, which is owned by ExxonMobil), the likelihood is great that they get their gasoline from major refineries, and the likelihood is also great that those refineries get at least some of their crude from OPEC countries. Since about 40 % of our total imports come from OPEC countries, it would be impossible to keep the big refineries going at the near-100% level (as they are at present) without that input.

A: The amount of known oil in ANWR is precisely zero (see essay here) - many different entities make many different estimates of how much there may be in the ground there, but until reasonable amounts of exploration are done, those estimates are nothing but guesses. A few of them are educated guesses, many of them are as educated as saying the moon is made of green cheese. Reasonable (as in US Geological Survey - see This Link) estimates are of 7.7 billion barrels of recoverable oil. Figuring one way, using US consumption at 20 million barrels per day, divided into that 7.7 billion, equals 385 days of supply. In reality, it will take years for the infrastructure to be built (pipelines, drilling facilities, production facilities, etc) even if there is any oil there at all - remember, the proved amount as of right now is zero barrels. Then, the production would take many years - you don't just produce it in a whoosh. Prudhoe bay, at around 13 billion barrels, has been producing for nearly 30 years. So rather than viewing it as so many days of supply, it might be more reasonable to view it as contributing to a lesser need for imports. The amount that would come over 20 years or so might be as much as a million barrels a day -- 5% of current US needs (remember too that US consumption is increasing by 2 to 4% per year). Not trivial, but also no panacea.

Q: Have you heard the conspiracy theory about the US gov wanting to use up and import the majority of the world's oil and use it up quicker and then have outside countries buy from our still intact drilling areas?

A: No, I missed that one (chuckle). It's patently ridiculous, the supplies/reserves present in the rest of the world are so much vastly larger than proved or even guessed reserves in the US, that it is a silly idea. We don't have any "intact drilling areas" in the sense you mean. There may be noteworthy reserves in the deep-water Gulf of Mexico, offshore California, and Alaska, but not anywhere near enough, by anyone's estimate, to outweigh our ravening consumption.

Q: Lastly, do you think our current usage of oil is sustainable?

A: Do you mean, can we in the US continue at current rates forever? Certainly not. Can we continue for 5 more years? Maybe, but the hugely surging demand in China, and soon in India, will likely make the US become no longer the world's primary customer for oil. That will mean that the exporting countries will no longer have the vested interest that they do today in our economy and in us remaining stable enough to continue to buy their product. They will begin to cater to China rather than to the US. That could happen within 5 years, who knows? China's gasoline consumption increased by something like 30% between 2002 and 2003, and shows no signs of stopping. They do have a long way to go to catch up with the US, but they are on the way. There will likely be enough oil for the US - but it will no longer be cheap. I refer you to the National Geographic article of a couple months ago, "The End of Cheap Oil." An even-handed treatment. But US consumption, at 27% of the world's oil production and 45% of its gasoline, is the lynchpin in the problem: we cannot blame China and assume no responsibility ourselve. The United States is the primary culprit.

If you mean is current usage in the world sustainable, certainly not, in any kind of long run. Depending on who you listen to, the global peak of oil production will be anywhere from 2005 to 2035. That is the time at which production + replacement of reserves (i.e. new discoveries) will no longer be greater than demand. Prices will surge. There will probably be oil till near the end of this century -- it will just be way too expensive to use for such wasteful things as fuel. Think about plastic -- most of the 73 million tons of plastic produced in the US and Europe each year is made from hydrocarbons (oil and gas). Increasingly, bioplastics from plants (information here) are being used in applications ranging from automotive plastics to computers and packaging, but to date the volumes amount to only a few hundred thousand tons per year.

A: See Above. Most gasoline marketers buy their gasoline from refineries - so a better question would be are there any refineries that do not import oil. The answer is very few - some small refineries use only local sources: for example, here in Montana there is a local company called Cenex that is a refining and marketing company. I believe its refineries get their oil mostly from the Williston Basin (might be some from Canada). Generally, all major marketers get their gasoline from major refineries, and all major refineries use imported oil - they have to, otherwise they would not have nearly enough (total US imports equal almost two-thirds of our consumption these days). To try to determine exactly where each refinery gets its oil, you'd probably have to ask each refining company - but all the big ones use imported oil including Middle East oil, and the mix changes from day to day.

Q: Also, where does the oil from Iraq currently go?

A: This link is about the Persian Gulf in general: Persian Gulf. This one has info about Iraq in general: Iraq. Explore the EIA site for more information.

As you know Iraq's oil exports are highly volatile these days. I used an average 5% of US imports come from Iraq to arrive at the figure of about 600,000 barrels per day go to the US. At times, this would be all of Iraq's production. When Iraq is producing at capacity, say 2.5 million b/d, that would only be a quarter of its production. I have no idea how the exports are allocated when the supplies are disrupted - e.g., if production is at 400,000 b/d, does it all go to the US, or does it go proportionately to the normal buyers? Also, nations do not buy oil for import, companies and wholesalers do, and they do it through normal business procedures: purchasing contracts, bidding on commodities exchanges, etc. One of those links I gave above lists some of the major purchasing companies, which include companies in the US, Spain, Italy, France, China, Malaysia, Japan, and elsewhere. That probably varies according to the needs of individual companies.

A: There is some information about world and US consumption on my oil page. You can find wildly varying estimates for the length of time we can still have oil -- look on the web for references to "global peak of production" -- some, the doomsayers, say that the peak of production will occur as soon as 2007. (See chart, above, from USGS Open-File Report 00-320, by L.B. Magoon) Others say it will more likely be in 2030-2040. In either case, this is not "running out", it is rather the time after which production will decline while (unless something happens) demand increases. There will then be high costs (much higher than today) and shortages, especially in places with high demand (like the US). A couple months ago National Geographic had an excellent article on "The end of cheap oil" - I recommend it for information such as you seek. Alternative energy sources are being studied, though not really aggressively - our addiction to the oil habit is far too strong right now.

To answer your initial question, "is any way of ensuring an energy source...", the easy answer is no, there is absolutely NO way of ENSURING an energy source in the next few years. If world economy could switch to completely renewable resources, such as solar, wind, geothermal, and hydropower, then yes -- but that is not likely to happen anytime soon - like decades. Iceland is the only country that gets 100% of its electric and heating from geothermal and hydropower sources. In contrast, the US gets about 4% from these sources. That cannot change overnight, or even over several years. It can only change through major technology changes plus changes in lifestyle, meaning energy conservation -- and I would not hold my breath on that— even with gasoline at $2.00 per gallon, US consumers absolutely refuse to conserve or change their lifestyles significantly. Even if we did, the burgeoning demand in places like China will likely soon displace the US as the most important market - so that the oil producers will no longer cater to our needs, as they do today. Energy is not really the problem; liquid fuel is.

A: The most recent figures at the Energy Info Administration This link has preliminary numbers for 2003. (This link shows month-by-month imports by country as recent as a couple months ago) Imports do vary somewhat month by month, but except for really volatile places like Iraq (and sometimes Venezuela), the figures are relatively constant. Our primary source of oil imports (2003) is Canada (16.9% of all imports), followed by Saudi Arabia (14.5%), Mexico (13.4%), and Venezuela (11.3%). The amounts do vary, but Canada has been number 1 for some time. I ask people all the time to name the top 4 sources of our oil imports. I have rarely had anyone able to name all four - including major oil company geologists and others you might expect to know. More Information, and more information.

As indicated here, Japan's leading source of imports is the United Arab Emirates (25.3% of total imports for May 2004) with Saudi as a close second (24.2%). Japan gets about 79% of its imported oil from Persian Gulf sources.

A: Unless there has been some sale or change that I am not aware of, Union 76 is (and has been for a LONG time) the primary brand of Unocal (Union Oil Of California) - one of the larger Independent companies ("independent" has traditionally meant "not a major" - where "major" meant one of the real biggies, like Exxon, Chevron, Texaco, etc. With the mergers, all those old definitions are blurring; now they call ExxonMobil, BPAmoco, and Shell "supermajors". In any case Unocal is was probably the 9th or 10th largest US company. UPDATE 2006: Unocal has been acquired by ChevronTexaco, but the Union 76 brand (but not the 76 ball logo) was acquired by Tosco in 1997; Tosco was acquired by Phillips, and Phillips merged with Conoco - so probably in 2006 when you buy Union 76 gasoline, you're buying from ConocoPhillips. But the Orange 76 Ball still belongs to Chevron.

A: US proved oil reserves are estimated at about 22,667 million barrels. Source. Consumption is about 21 million barrels per day. Source

Doing the math yields 1079 days of reserves in the ground. But it is not that simple; for most of the past 6 years, reserves have been replaced each year by new discoveries, existing-field development, and secondary and tertiary recovery. Put another way, in 1999 we probably had 1079 days of reserves; and we still do. The problem is that we cannot produce even 50% of our daily consumption from the reserves in the ground, which is why we have to import about 63% of the crude we use. Even with all our 500,000 wells pumping (that's more than half of all the oil wells on earth), they only average about 10 barrels a day per well, for a total of about 5 million barrels per day. The other 14 million barrels per day has to come from somewhere. And you cannot make a 10-barrel-per-day well produce 100 barrels per day, no matter what you do.

However, you appear to be talking about the Strategic Petroleum Reserve, not in-the-ground reserves. From here I found that the SPR has about 688 million barrels in it today (April 2006). Divide that by the 21 million barrels per day we consume, and you get just over 33 days supply. The reserve accepts about 30,000 barrels a day, so stopping SPR deposits (April 2006) will increase the amount available for general consumption by less than two-tenths of one percent.

I have no idea how much/how long the SPR was tapped back in 1991, but it is more or less irrelevant now. The current high price of gasoline is driven by a world-wide tightness of oil supply, whereas in 1991, the spike was caused by short-term delivery problems in a market that was otherwise pretty flush with oil -- not a glut, but there was plenty out there to meet demand (most of which was in the US), and to have extra production capacity left over. Today, with China's incredible increase in gasoline consumption, and the US consumer's refusal to conserve in the face of the high prices, there is little extra oil production capacity in the world (which is why the price of crude is so high), and tapping the SPR will make little difference, in my opinion. Add to that the fact that US refineries are at peak capacity, and that they are under tight constraints for creating small-volume, specialty blends for local markets (much, much more expensive to make), and a few more trivial elements, such as interruptions of production in Russia, and you have high gasoline prices.

Even if you were to use some of the oil in the SPR, and even if it did reduce our need for imports for a few days, the price would not decrease significantly. Oil is a global commodity, priced in a global marketplace. The oil that would come out of the SPR, just like the oil that comes out of West Texas, or the oil that comes out of the North Sea, or the oil that comes out of Indonesia, all costs about the same. There are some differences, such as west texas crude being more expensive (say, $70/ barrel) than Saudi crude (say, $67 per barrel) - because of refining and transportation differences. The refining step can add 20% or more to the cost; if that step is trivial, then the original oil will cost more to be competitive and profitable.

Basically, Americans need to get used to it. In my opinion, this situation is not likely to change much (first stated in 2001).

A: The quotes for gas production are mostly for gas produced from gas fields -- meaning, fields that are mostly gas, not mostly oil. The US has very significant amounts of gas that is "associated gas" meaning that it is produced as a byproduct of oil production in what is predominantly an oil field. We do this because we need the natural gas so much, and because our infrastructure allows it. In many foreign countries, the "associated" natural gas is flared off because it is not economical to produce it. Note: The US is no longer listed as a close second.

Q: 2nd question Is petroleum organic or a mineral? Some Russians say its a mineral formed without need of living organisms and that that changes the geology of looking for new fields. What do you think?

A: Petroleum in not "a mineral." A mineral is a naturally occurring chemical compound with a regular crystalline structure. Petroleum is not crystalline when it solidifies. The phrase "mineral oil" is a misleading name, indicating simply that it occurs from the earth as opposed to, say, whale oil or soy bean oil.

The question of the source for petroleum -- organic matter vs. non-organic ("abiogenic") -- has been debated for years. There are few scientists who would argue that there is NO oil produced that has non-organic origins, but most would say that the amount is very small. By far most of the oil and natural gas in the world is generated by heat and pressure applied to accumulations of organic material (mostly plants). It is possible that there might be small commercial accumulations of abiogenic (= not organic) gas, but they will be small.

A: 42 gallons per barrel makes about 19½ gallons of gasoline, 9 gallons of fuel oil, 4 gallons of jet fuel, and 11 gallons of other products, including lubricants, kerosene, asphalt, and petrochemical feedstocks to make plastics. That adds up to more than 42 gallons because of something called "refinery gain" - the processing and chemical changes increase the volume.

A: 19.5

Q: How much does the average gas station pay to buy a gallon of gasoline from an oil company?

A: Retailer (gas station) profit is about 1 to 5 cents a gallon. So they pay the posted price, less that and less taxes (federal, state, local).

Q: I did some simple calculations, and the numbers don't seem to make any sense. Let's assume that the price of crude oil is $37.00 per barrel. At 19.5 gallons of gasoline per barrel, this means that a gallon of gasoline in its crude oil form costs $1.90. Yet, when I pump it into my car, I'm currently paying $1.76 per gallon. This means that the gasoline is losing 14 cents per gallon in value when going from ground to gas pump. This must mean that everyone involved in transporting and refining the oil and gasoline must be marking down the final price of their finished product. Companies mark up, not down. Obviously, there is something wrong here somewhere.

A: The 42-gallon barrel of crude oil makes about 19½ gallons of gasoline, 9 gallons of fuel oil, 4 gallons of jet fuel, and 11 gallons of other products, including lubricants, kerosene, asphalt, and petrochemical feedstocks to make plastics. [See also this EIA page] That adds up to more than 42 gallons because of something called "refinery gain" - the processing and chemical changes decrease the density and hence increase the volume of the refined components. So, crudely (pun intended), a $37 barrel of crude represents about 88 cents a gallon to start with. That 88c represents the cost of production plus producer profit. Go up from there.

OIL REFINING QUIZ What company is the largest oil refiner in the US?   Click the down arrow to select answer --> ExxonMobil Koch Chevron Marathon Valero Citgo Tesoro BP Frontier Sunoco ConocoPhillips Shell 50 companies not listed above

Numbers that I found some time ago had this for other increments of the cost per gallon:
refiner cost - 13c
marketing cost - 5c
transportation cost - 15c
retailer cost - 5c
refiner, marketer, transporter, retailer profit - 10c (total, not each)

Add that to 88c, add the average 43 cents tax, and -- rather remarkably - that adds up to $1.79, if I added correctly - just about what you are paying. All the numbers vary depending on a long list of things -- refiner costs go up when they have to make specialized local blends (one reason for CA and Chicago having higher prices), marketing costs are higher in competitive markets (i.e., big cities), transportation costs are higher in the boondocks, or generally in places distant from refineries, retailer costs depend on number of employees, whether or not it is a franchise (some rural stations that I know of here in Montana have to pay many thousands of dollars per year for the "right" to be branded Conoco, or whatever); and the total price also depends on differing state and local taxes. So these numbers would be ball-park, approximations.

2006 Question: Why is the price of gasoline not even higher than it is, given that the price of crude is around $63 per barrel, close to double the price of a couple years ago? Answer: I truly don't know - evidently the forces driving the price of gasoline are beyond me. I'm amazed that the price of gasoline is not much higher than it is. • Link showing price breakdown in California

See also EIA Primer on Gasoline Prices. Other links: this article and this GAO report and This One and another. And Gas Q&A.

A: I have no idea. Given my cynical view of most Americans, my guess is that if they used better engines or hybrid cars to get better mileage, they would just drive more, and within a few years consumption would be growing again. The 4% or whatever it is increase in gasoline consumption in the US annually is not so much a result of increasingly bad engines or SUV's (although MORE SUV's is a factor) as it is the uncaring wasteful driving habits of many Americans. In my opinion.

A: I don't really have an answer - and as near as I can tell I don't have a financial interest in much of anything. I guess I think that about the only significant way to make a dent in consumption is through aggressive conservation, and I just don't see Americans doing that. Even if Americans could "see the light" it may well be totally irrelevant. I was amazed recently to discover that China's consumption of gasoline had increased 30% in one year (I think from 2002 to 2003). That sort of thing will not be stopped or slowed anytime soon - the developing world wants its piece of the pie, which has been largely American/West European/Japanese until now. That is one reason why global supply is tight right now, and it seems likely to me that it will only become a more significant factor in the global energy market.

Q: You live a little too far out in the boonies to be pushing for mass transit. This December we will be completing a overhead rail service between downtown Mpls, the stadium (Twins and Vikings) and the airport and the Mall of America. My gut feeling is that only visitors will use it but that remains to be seen. How about a dollar a gallon tax, the money to be allocated toward conservation projects, hopefully it will not be raided as the tobacco money was.

I'm all for a big gasoline tax, but no politician and most americans will never go for it (well, maybe not never, but not until desperation is near). It would probably force a certain amount of conservation, it would provide money to support lots of things (there would be so much, I would not think it would need to all be allocated to "green" projects). If it could be enacted, it might also cause a civil revolution - or at least a major overturn of the membership of congress. After all, most western Europeans have been paying $3.00 per gallon in taxes (or more) for a long time.

There will likely be serious gasoline shortages long before there is a real global oil shortage. That's the current situation, gasoline is the problem here rather than oil globally. I'm not one of those who says we'll be out of oil by 2010 or any particular year. I have no idea when it will be -- and I think those who say they know are wrong. But situations like we have now are very likely to continue.

A: Well, I know that there are Gulf Oil stations in the Northeast - Pennsylvania to New England, I think - but Gulf Oil no longer exists, Chevron, which bought Gulf in 1984, sells the right to use the Gulf brand to a convenience store chain, I believe. Neither Conoco nor Phillips was one of the original Seven Sisters. Texaco traditionally marketed in all 48 states - but I don't know what is going on with that now that they are merged with Chevron. BP bought the Gulf stations in the southeast states, and I'm sure they still market there, but I don't know where else... Shell also once had stations in most states, but I'm sure they have reduced that a lot by now.