June 30, 2006
-- by Dave Johnson
This is very interesting. In The Real Economics of Oil, Sheldon Drobny sats that gasoline is really only a waste product from the refining process. The real profit is from products like asphalt, lubricating oils, paraffin wax, heating oil, tar and others.
Essentially, gasoline is a waste product of the oil refining process and the oil companies get rid of their hazardous waste and charge the public to do that. It actually reduces the cost of the oil refining process and at the same time contributes greatly to the greenhouse effect of global warming.Go have a read.
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My apologies for being blunt, but the article is crap. Appallingly bad analysis with leaps of logic and conclusions that come out of nowhere, and a thorough misunderstanding of what a "byproduct" is in the refining process.
At one time gasoline was a byproduct, but, you do have to account for all the other products that are being sold on the open market.
There are several "official" websites around that try to put the entire cost of crude oil in gasoline only terms, which is very false.
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