It takes about $0.20 to refine a gallon of gas, so ~2kWh/gal. Except, It obviously actually takes less electricity than that, because there are other costs to refining. Not a bad investment in energy terms, when a gallon of gasoline contains ~36.6kWh worth of energy.
Refining isnt actually all that expensive. At least in California, taxes are a higher percentage of total price (18.4c federal + 35c state, per gallon).
Gasoline has energy density of 34.2 MJ/L, or 9.5 kWh/L[1]. Its retail price is about $3/gallon, or $0.8/L.
So, assuming 100% efficiency, the energy source for making gasoline should be ~$0.084/kWh to break even.
Energy Information Administration (EIA) estimates 2022's solar/wind generation cost at $73.7 and $55.8 per MWh [2], or $0.0737 and $0.0558 per kWh.
Assuming wind power, gasoline generation has to be ~66% efficient to break even, which is (I guess) not physically impossible, but an incredible engineering challenge.
...and that's assuming retail price. I'm not an energy expert, but [3] seems to say that gasoline's current bulk price is ~$1.5/gallon, which pushes the technology firmly on the side of losing money.
The graph says it all. There haven’t been any technological changes in oil refining to make gas change in value. That it costs more per gallon in raw dollar terms means that the value of the dollar relative to the value of a gallon of gas has dropped massively.
Even more if you figure that today’s cars are pretty damned efficient and use way less gas than a car from the 70s, so we extract more value from a gallon of gas in terms of work performed.
That’s just how much refining fuel costs. There is no monopoly of fuel suppliers holding the gas price up, and gas stations make very little money selling gas itself.
Isn't California gasoline generally more expensive because it requires a more stringent formulation of gasoline and so only a handful of refineries produce that?[1][2]
I imagine if the whole country used the California standard then gas prices in California would go down.
I don't know how much it would go up in the rest of the country though.
Really we should just ditch gas. The political drama from the last 50+ years over oil alone seems like a no-brainer for anything but gasoline, even if it costs more.
America no longer wants cheap oil; it crowds out the natively produced stuff. Gasoline is currently < $1/gal in many states due to the production glut and pandemic, and the president is currently talking about how to increase the cost of oil.
I don't think that everyone has fully grasped how America being energy independent changes the game.
Every American uses around 400 gallons of gasoline and 12,000 kwh electricity per year. So if you put a tax of $2 on each gallon of gasoline and 7 cent on every kwh electricity, you would finance that.
And once it scales, it will be cheaper and cheaper, jut like most other products. With a 10 percent price reduction per year, it would be $620 per person in 10 years, roughly the same as an internet bill.
In the rest of the world it's even cheaper. The average person in the world could be offset for $400 now.
The transformation of the US for largest importer to largest exporter in only a few years is stunning.
Unfortunately, this is a geopolitical tactic to crush Saudi Arabia and other oil-producing nations like Iran so that it defunds terrorism. The tipping point for the US between electric cars and gas is about $6/gallon from what I've read. CA is getting close, I'm paying $4/gallon but most of that is taxes these days. We can't move forward until we get rid of $2/gallon gas throughout the country.
Your statement makes me wonder - how much does petroleum actually cost? I mean if we could somehow ignore the rent, royalties, and direct taxes, what is the true cost of a gallon of gasoline in terms of capital, goods, and labor? Or is this too variable depending on source of petroleum, refinery, and so on? If so, what is the low end and what is the high end?
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